"depsoit"/"reward" avoidal of protection scheme

becca5391

I posted about an ongoing problem a while back I've been having with my letting agent. I rented a student house with 8 others in Leeds and rather than charging us a deposit the landlord charged us an admin fee which we would get part of back (£100 each) as a "reward" if the house was left in good condition.

The landlord won't give us this back because there was damage to one of the beds, which was present since we moved in, but he is claiming we did it. We have photos of some of the damage from the day we moved in but he says the damage became more extensive during our tenancy and blames us for this.

It obviously seems unfair that we are not getting this back. However I believe the reward fits the description of a deposit so it should have been put in a protection scheme anyway. The landlord did make us sign some papers saying it wasnt a deposit but if it fits the description I am wondering whether I would have good reason to go to the small claims court to try and settle this.

Can anyone help me out with this? I'll post the document describing the reward.

becca5391

The forum won't let me post the link to the image of the description but if anyone thinks they could help I can email it.

jjlandlord

I'm no lawyer, but depending on the wording of this arrangement I think it could work. Ie. something like that:
Admin fee is £x. If when you vacate the property is in good order we will pay you £y.

Of course the key here is to define "good order" and also who decides that it is.

theartfullodger

Disagree JJ.

IIRC the legislation makes it clear such an arrangement would be a deposit.

Becca suggest you 'phone Shelter 0808 800 4444 & get their views.

bitsandpieces

Agreed - give Shelter a call. I think the legislation specifically aimed to rule that type of thing out - otherwise any landlord could easily wriggle out of deposit protection.

theartfullodger

The legislation is here..
http://www.legislation.gov.uk/ukpga/2004/34/section/213

& subsesctions 7 & 8 of clause 213 read...

(7)No person may, in connection with a shorthold tenancy, require a deposit which consists of property other than money.
.
(8)In subsection (7) “deposit” means a transfer of property intended to be held (by the landlord or otherwise) as security for—
.(a)the performance of any obligations of the tenant, or
.(b)the discharge of any liability of his,
arising under or in connection with the tenancy.

I think that's pretty clear. The money is a deposit. You can call it anything you like, but it's a deposit...

It would be wrong of me to suggest the landlord is a cheating toe-rag trying to avoid the law, so I won't suggest that.

jjlandlord

I agree that the arrangement is threading very near the limit. However I think it could be worded to work:

The tenant pays an admin fee. This sum of money obviously does not match in any shape of form the definition of a deposit from HA 2004.

Then, quite separately, and unrelated to this admin fee, the landlord agrees as an incentive to pay (with his own money) a 'bonus' to the tenant if he leaves the property in tip top condition.

I seem to remember it was you who mentioned paying a 'bonus' to a tenant if he managed to always pay rent in full and on time. This seems similar.

theartfullodger

Curses! Nabbed again!

Blimey, better start thinking hard!

G_M

As with so many of these 'grey' areas, only a court could ultimately decide.

My own view is that however you word it, even by seperating the 'admin fee' from the 'bonus', it is clear that what is happening is that the LL is taking some money from the tenant and agreeing to return some money at the end, depending on the condition of the property.

It's a deposit (my view).

Also my view that a judge would see it that way as well.

If negotiation fails, I would take this to court for
a) return of the deposit and
b) penalty of (up to) 3 times the deposit for non-compliance with deposit registration legislation.

90% confident the court would find in the OP's favour.