Warning against legal loophole in deposit protection schemes_ DPS

She1234

All tenants of rental property who have their deposits secured in DPS, be aware of a legal loophole which could prevent you getting your bond returned at the end of your tenancy.

Recently I rented a property from PPM Letting agency in Wigan for 2 years and got it for a reasonable price in times when it was hard to rent property. However then the property market became buoyant and the letting agency (PPM) saw the chance of getting more money,so they issued me with a Section 21 to get me out of the property so they could rent the house for a better price. I was given 2 months to leave, but I handed the keys back within 2 weeks....fully paid up (as can be shown on my bank statements and as I am a business, audited by an accountant).

The house was a lovely detached property and when we left we had the "white carpets" cleaned, as well as the house cleaned and gardens brought up to scratch. However the Letting agency kicked up a fuss about minor stupid things and made it clear I would never get my deposit back, even though it was in a DP scheme. As a normal punter I knew nothing about these schemes but the agents seemed very confident I would never see my money again. They had good reason to be confident as they had discovered a legal loop hole in the system.

I refused to sign their final inspection form because I disputed their claims, I requested that an independent assessor be allowed in to inspect the home as I did not believe or trust their judgement as to its condition. The assessor was not allowed entry when the intitial date/time could not be complied with, and that was the end of that!

PPM rentals would not give me my deposit ID number and despite many emails the “Deposit Protection Scheme” agency known as DPS failed to respond. I emailed DPS several times to inform them that the bond was in dispute, quoting the address only as I didnt have an ID number- but had no response.

What happened next: The agency had apparently sited “Rent arrears, damages, cleaning & replacement items” as the reason for reclaiming my bond and completed a Statutory Declaration, in accordance with Section 21 of the DP companies Terms and Conditions countersigned by a solicitor. DPS advised that as this was a legal document sworn to and witnessed by a solicitor I had very little legal comeback. Re the charges....all lies!

I had bank and accountancy records which showed zero bank arrears. Aside from one door which I would have replaced, there were no other damages. Had I known about these accusations I would have contested them, but I didnt know.

HERE,S THE STING: Yep here it the totally legal loophole which meant my £750 was returned to the letting agency against my will and knowledge:

Why did I not dispute these false charges?

Because after I had handed the keys back on Aug 17th 2011, the DPS wrote to me in Nov 2011 at the rental address and giving me 2 weeks to respond and my failure to do so would result in my money being returned to the agency.

So question: How could I pick the letter up when I was no longer a tenant of the property they wrote to? Duhhhhh.

It seems this is legally acceptable practice. I argued with DPS that surely every tenant seeking a return of bond would never live at the former property, so why is it DPS policy to do write to them at an address they no longer live. This was not sent by registered post, and yet that letter had a value of £750 to me, so they dont even have proof of receipt.


The only contact details the letting agency gave to DPS was my email address. So I asked DPS why they had not tried to contact me via my email address. They had no reply and just blamed me.

I asked if there was a governing body I could go to in order to complain about the practice of both the letting agency and DPS- and I was simply told "CAB". They didnt really care.


I am shocked that an organisation who were supposed to be fair and protect the interest of both parties, in this instance protected the letting agency and just gave my money away despite me sending around 20 to 30 emails to them informing them this was a bond in dispute. It seems I have no legal recourse and have to just give up.




Does anyone know of an Ombudsman or legal body I could report the 1) unethical behavoir of this Letting agency and 2) this loophole in DPS,s processes which allows a tenants money to be given away without their knowledge? The whole thing is a con!

silvercar

Recently I rented a property from PPM Letting agency in Wigan for 2 years and got it for a reasonable price in times when it was hard to rent property. However then the property market became buoyant and the letting agency (PPM) saw the chance of getting more money,so they issued me with a Section 21 to get me out of the property so they could rent the house for a better price. I was given 2 months to leave, but I handed the keys back within 2 weeks....fully paid up (as can be shown on my bank statements and as I am a business, audited by an accountant).

Was the rent laid up to the end of the tenancy ie the end of the full 2 months notice period or just until you left after 2 weeks?

Your contract would require that rent is paid until the end of the fixed term ie the full 2 months even if you chose to leave earlier.

I thought DPS required tenants to supply an alternative address (fixed not email) when the deposit was initially registered. Did they have another address to write to you at? Did you advise them of an alternative. They won't send out legal documents by email, so if they have no other address all they can use is the one you have supplied and assume you have mail forwarding.

jjlandlord

silvercar wrote: »

Was the rent laid up to the end of the tenancy ie the end of the full 2 months notice period or just until you left after 2 weeks?

Your contract would require that rent is paid until the end of the fixed term ie the full 2 months even if you chose to leave earlier.

True, though in practice it all depends on the landlord/agent's actions when and after OP moved out and handed the keys back: If they accepted what was an offer to surrender then the tenancy ended at that point.

Werdnal

If I get this right, the letting agent never gave you the DPS information at the start of the tenancy - is that correct? If so, the S21 they issued was invalid and you could have ignored it.

I also agree with reply above in that your tenancy ran to the end of the term, and if you chose to leave early, and only paid rent to the date you chose to leave, then the letting agent/LL can claim rent owed until the end of the term.

S21 does not end the tenancy, so you would still have been bound to your rent liability for the whole term you signed for, or until any notice you gave that you were leaving the property ran out. Did you give your own correct notice that you were leaving, or did you just turn up at the LA office with the keys?

00ec25

I sympathise with your loss but it is hardly a legal loophole as this process is clealry explained on the DPS website and you can read it without being registered with them

As far as i can make out it works both ways, you can use that process to claim back you deposit if the LL/LA does not respond within 14 days.

I agree that writing to the rental address is pointless but what else can they do if you have not given them another address at which to serve (legal) notices post tenancy.

http://www.mydeposits.co.uk/tenants/guides

The sooner tenants start to educate themselves about the deposit process the better ..

RabbitMad

Why doesn't the OP start a claim against the LL in the small claims court - a simple letter before action giving 14 days to pay up followed by filing a claim.

geoffky

go to small claims,,cost about £30... result =your deposit back...what are you waiting for?

red40

She1234 wrote: »

Does anyone know of an Ombudsman or legal body I could report the 1) unethical behavoir of this Letting agency and 2) this loophole in DPS,s processes which allows a tenants money to be given away without their knowledge? The whole thing is a con!

Agree with everybody else, it isnt a legal loophole at all. You were required to provide an alternative address. The faq link below answer gives you the necessary information.

http://www.mydeposits.co.uk/tenants/faqs/

Johnhowell

Also, you could have had your post redirected by Royal Mail.

G_M

Compared to pre-deposit registration days, the system is, for tenants, a huge improvement.

No system is foolproof, but as others have pointed out, the problem here is actually one of tenant-education, not legal loopholes.

If a tenant takes the time to find out how the system works, and follows the processes, all is well.

Same applies to buying a house.... or a car.... or applying for a job... or.... or if you don't know the process, you'll mess up. That's not a 'legal loophole.

That's ignorance.

tbs624

She1234 wrote: »

..... I am a business, ......

....As a normal punter I knew nothing about these schemes

OP - most of us can understand that you feel cheated but as some of the others have said, it looks like you have allowed the LA/LL to retrieve your deposit because you failed to keep in touch with the deposit scheme administrators and apparently failed to update your personal contact details with them. If you had done this then you would have had the opportunity to challenge their version. If you run a business, you surely have the "nous" to read up the Ts and Cs for anything that relates to any of your money.

All 3 deposit schemes have websites and the way in which a tenancy deposit dispute should be handled is set out very clearly on there.

You say that you emailed DPS several times and got no response. Did it not occur to you to pick up the phone and speak to someone?

Yes a LL should (a) scheme register your tenancy deposit and (b) provide you with evidence of that registration plus a copy of the schemes prescribed info.

What your experience shows is that Ts absolutely have to look after their own interests, ensuring well in advance of the tenancy end that they fully understand how the system works. The LA acts for the LL so don't ever rely on them to give you guidance on how to do battle over your tenancy deposit.

That said, if you have definite proof that the LA/LL has lied within a statutory declaration ( ie rent arrears) then you should seek some advice via a fixed fee appointment with a suitably experienced solicitor.

If you have not yet made a formal written complaint to DPS you may want to do so, if that stat dec does contain falsehoods. The address can be found under FAQs on the DPS website IIRC

If the LA is a member of ARLA, NALs or similar you may want to check out the relevant code of conduct.