Rent miscalculation (by Landlord) deducted from deposit?

Tashd

We are currently in the process of agreeing the amount of deposit we need returning from the landlord of our previous rental property. The deposit is currently with the DPS and we have agreed with the landlord that he can deduct professional cleaning costs and also the cost for a decorator to make good some holes we left upon moving out.

Our landlord has however, just realised that he had mis-calculated the amount of rent + council tax that we should have paid him each month (we pay council tax to him along with the rent as it is in his name). Having looked back, we have all discovered that this mis-calculation occurred after we signed the lease. We agreed in the lease to pay £1278.33 rent + £93 council tax on a monthly basis. Two weeks after moving in he realised that the council tax had increased from £93/month to £137/month and, via e-mail, informed us that our standing order should be amended to £1322.33 to reflect this increase. We amended the standing order and have been paying this for 11 months having not even checked whether he had calculated it correctly (we had no reason to doubt it). It is now obvious though, having looked back at the figures that he had completely mis-calculated what the revised monthly payment should be, and that we should have in fact be paying £1278.33 + £137 = £1415.33 each month.

As a result of this gross mis-calculation, we technically now owe him over £1000 to cover the shortfall, which he wants to take out of our deposit. We feel this is completely unfair and that we are not obliged to lose over a grand of our deposit to make up this shortfall, since it was completely his fault that we have been under-paying him each month. We have offered to meet him halfway seeing as it was clearly his mistake however, on the otherhand we should really have checked his calculation. He won’t agree to this though and is demanding the full shortfall from our deposit.

Can anyone advise as to where we stand on this, and whether we are in fact obliged to cover this huge shortfall in rent?

Thanks!

P.s. I apologise for the long-windedness of this issue! Hope it makes sense...!

Rupinder_Khurana

Hi,

Let me go by lease deed which you have entered, leaving apart what you guys orally discuss. If you can at least quote the payment clause and tax clause of the deed, I can check it for you and advise accordingly. If you could post the whole of the deed (Excluding any confidential info on it), then I check and suggest, if anything is possible.
If you also go ahead and check it, you will find what recourse is to be taken under such circumstances. If there is no such clause, then if agreed in the deed that you would pay the tax as applicable, then obviously you would be liable to pay for it. Any which way, if you could go ahead and read the payment and tax cl, you yourself would understand and find some way out. Else post it and let me check it.

Regards,

Tashd

Thanks for your response. The lease is literally only a paragraph long and reads:


Date

Rental address

Tenant 1 and Tenant 2 agree to rent the above property from Landlord for a period of at least eighteen months (with option to leave after twelve months, with a two-month notice to leave from either party). Total monthly rental of £1,381 (£1278.33 pcm + current council tax of £93 and water rates of £10) to be paid into my account on XX of each month beginning XX. All other utility bills including electricity, phone and gas will be the responsibility of Tenant 1 and Tenant 2 and are to be paid as and when needed.

Six week deposit of £1770 to be paid on signature and be placed into a deposit safety scheme.

Subject to satisfactory references

Signed:


There is nothing further than this paragraph that was signed. Though the landlord did say that should any disputes occur, we would refer back to a standard AST.

It is also worth noting - we ended up putting the water bill in our name and therefore, paid this ourselves.

jjlandlord

Tashd wrote: »

We agreed in the lease to pay £1278.33 rent + £93 council tax on a monthly basis
....
Two weeks after moving in he realised that the council tax had increased from £93/month to £137/month and, via e-mail, informed us that our standing order should be amended to £1322.33 to reflect this increase. We amended the standing order and have been paying this for 11 months
...
he had completely mis-calculated what the revised monthly payment should be, and that we should have in fact be paying £1278.33 + £137 = £1415.33 each month.

As a result of this gross mis-calculation, we technically now owe him over £1000 to cover the shortfall

What was exactly the term agreed in the tenancy contract: £1278.33 + £93 or £1278.33 + council tax?
If the former that's only what you owed whatever subsequent changes in council tax, until you agreed to higher amount, that is.

If you agreed to pay council tax then, as you underpaid, you are liable to cover the difference.
I should add that if you did agree to pay the council tax it would seem the minimum diligence for you to check how much you were in fact liable for.

Tashd

jjlandlord wrote: »

What was exactly the term agreed in the tenancy contract: £1278.33 + £93 or £1278.33 + council tax?
If the former that's only what you owed whatever subsequent changes in council tax, until you agreed to higher amount, that is.

If you agreed to pay council tax then, as you underpaid, you are liable to cover the difference.
I should add that if you did agree to pay the council tax it would seem the minimum diligence for you to check how much you were in fact liable for.

Hi JJlandlord.

The exact term was:

Tenant 1 and Tenant 2 agree to rent the above property from Landlord for a period of at least eighteen months (with option to leave after twelve months, with a two-month notice to leave from either party). Total monthly rental of £1,381 (£1278.33 pcm + current council tax of £93 and water rates of £10) to be paid into my account on XX of each month beginning XX. All other utility bills including electricity, phone and gas will be the responsibility of Tenant 1 and Tenant 2 and are to be paid as and when needed.

So we agreed to pay an exact amount for council tax, as opposed to just 'council tax'. We were told that it would be £93pcm before signing it, and that is what we signed for.

The main issue I can see, is the fact that he e-mailed us since signing the lease telling us that the council tax had increased to £137pcm and to amend our standing order to reflect this, quoting the amount to change it to - which we did, although the amended amount was incorrect due to his miscalc. So by freely making this change ourselves, it seems that we are potentially now liable (because he gave us the figure, but just totalled it up incorrectly)...

agrinnall

I think you're going to have to pay the difference. Firstly the CT should have been in your name and paid direct to the council rather than to the LL, while it may be legal to do it the way you have it's far better for you to have full control over it than hand it over to the LL and hope that he pays it. Second, did you not think there was something wrong when you were told that the CT due had increased but the amount you were to pay to the LL had decreased? Surely that should have rung an alarm bell with you that one of the things you'd been told was incorrect? Or did you just think that it's less money going out so you'd keep quiet and hope for the best?

jjlandlord

Tashd wrote: »

So we agreed to pay an exact amount for council tax, as opposed to just 'council tax'.

I'm not a lawyer, but from what you quoted it's not clear what you agreed to pay apart for a total rent of £1381pcm.

Let's say that the agreement is that rent includes council tax as seems to be implied: As the total amount of rent is fixed and nothing states that it might change according to council tax, I would argue that you only owed £1381pcm for the whole fixed term, whatever happened to the actual council tax amount.

I don't understand why your landlord asked you to change rent to £1322.33 as it was lower that your original rent... and why you agreed (unless of course you realised your landlord was proposing to reduce rent!)

Tashd

agrinnall wrote: »

I think you're going to have to pay the difference. Firstly the CT should have been in your name and paid direct to the council rather than to the LL, while it may be legal to do it the way you have it's far better for you to have full control over it than hand it over to the LL and hope that he pays it. Second, did you not think there was something wrong when you were told that the CT due had increased but the amount you were to pay to the LL had decreased? Surely that should have rung an alarm bell with you that one of the things you'd been told was incorrect? Or did you just think that it's less money going out so you'd keep quiet and hope for the best?

We honestly just didn't realise the mistake. It sounds ridiculous that we didn't notice, but the reason being because we (myself and my boyfriend) have a separate account which our rent and bills come out of. We pay a nominal amount in each for rent and bills (which is the correct amount) from our own current accounts, and then the standing order to our landlord goes out of this separate account (which we assumed was the correct amount). We accumulated excess in the account (which didn't seem vastly excessive at the the time) which we would we use to pay for household things - not realising that this excess was due to us underpaying the landlord. It is now blindingly obvious this is where the excess had come from.

We're both kicking ourselves now for not having picked it up, but due to our convoluted way of paying for rent/bills it meant it did not flag up as an obvious issue.

I still feel however, that due to the fact he told us completely the wrong amount to pay, combined with our own stupidity for not noticing the error, we should at least meet halfway? Due to the fact he has played a (leading) part in the error - it is surely only fair that we both take responsibility rather than us having to take the full hit when he made the miscalculation?

Thanks to everyone for your help by the way - it's much appreciated as it's a lot of money to lose in one hit and we really want to be sure we are actually liable to pay it...!

wastedtalent

At best you'll have to make the difference between 1322.33 and 1381, and then i guess it depends if the term 'current council tax' implies that it could change (although then a fixed amount is stated).

Tashd

jjlandlord wrote: »

I'm not a lawyer, but from what you quoted it's not clear what you agreed to pay apart for a total rent of £1381pcm.

Let's say that the agreement is that rent includes council tax as seems to be implied: As the total amount of rent is fixed and nothing states that it might change according to council tax, I would argue that you only owed £1381pcm for the whole fixed term, whatever happened to the actual council tax amount.

I don't understand why your landlord asked you to change rent to £1322.33 as it was lower that your original rent... and why you agreed (unless of course you realised your landlord was proposing to reduce rent!)

We have traced the e-mail back to work out why he quoted the figure of £1322.33. In the e-mail he worked out the increase was £44pcm (137 - 93) and added this to £1278.33, rather than adding £137 to £1278.33.

The fact that this happened 2 weeks into the tenancy also goes some way to explain why we didn't realise the error ourselves since it was the first payment we were making (the deposit and 1 months advance rent was paid as a bulk amount a month before moving in) and we obviously weren't familiar by this point what the total amount was (especially since it was an amalgamation of figures). I do realise we really should have at least referred back to the contract at this point though.

I can keep trying to justify why the error went unnoticed/kicking myself for not picking it up at the time, but at the end of the day it happened and surely we (ourselves and the landlord) are jointly responsible?

Ideally I want to raise a dispute through the DPS as at worst case, we'll lose the £1000, but we've always been on v. good terms with the landlord and it would be a real shame to end things on a sour note, especially if it turns out we are in the wrong, having still contested it. But on the other hand it is a lot of money to just surrender...

DVardysShadow

Go to the council and make sure that your too clever by far landlord has actually paid. 'cos it will be your hide the council will go after if he has not paid. And if there is a shortfall don't pay the landlord, pay the council.

And finally, never contract for the landlord to pay your council tax unless he is more liable than you - eg for a House in Multiple Occupation.