Section 21 - don't have a protected deposit

johnjameson

I have a flat with tenants in
I need to sell - I can't afford to keep anymore

The tenant has been to the council and they've given a letter saying that I must evict by first serving a Section 21 and then evicting

The tenant wants to be evicted as they want a council flat
They have told me that they will continue to pay all rent owed regularly as they don't want to get a mark against their credit history

Problem: I never put the deposit into a protected scheme

Where do I stand? What should I do?

I called up mydeposit.co.uk today. It's been 3 years since I took the deposit - I've just put it aside in a bank account and there is no problem in paying back immediately. They've said that I can register with them - but whether or not it will have any validity is another question

Help
Need advice


John

I_have_spoken

Have you considered selling to a LL with the tenants continuing to rent. Have they been decent?

Outside of a few 'hot spots', many flat are being bought to BTL LLs anyways, as FTB who can get a mortgage don't want them.

But if the tenant is willing to be made homeless, for the S.21 to be valid you'll need to return their deposit then serve the S.21.

Werdnal

Registering late is not an option.

Return the deposit in full to the tenant. Following day issue a VALID S21 notice - I must stress the valid as you need to issue it correctly, serve it correctly, date it correctly and have the right expiry information on it. Do you know how to do this?

As the tenant wants council housing, you will have to follow through the whole eviction process as the council will not house them on the strength of the notice alone. The notice does not end the tenancy, only the court possession order you apply for once the notice expires will do that. So, you need to get the notice 100% correct, otherwise court will chuck it out when you apply for possession and you start all over again.

And even if you return the deposit tomorrow, tenant can still sue you for 1-3x the deposit value for failing to protect it ... and they can lodge this claim up to 6 years after the tenancy ends.

Or as above, you can sell with the tenant still there if you can find a LL willing to buy it.

johnjameson

guys, thanks for the replies

@Werdnal, thanks for letting me know that registering late is not an option - i'ts something i would have considered

selling to a LL - this is what will most likely happen

the tenant is lovely. she needs a 3 bedroom place as she has had a baby and now has 3 boys, 2 of them much older
my place is a 2 bedroom flat
so... whatever happens, she doesn't want to stay

question: what if i return her deposit after?
yes: i've understood what has been said

she's already discussed with me today about continuing paying rent while the section 21 is served and then she is evicted. she's happy to pay the rent as long as she gets her deposit back

so, paying the rent is an incentive for her

if i gave back the deposit, then she will still be ok - she's a very honest person

giving back the deposit: raises questions that don't need to be raised!

it's a rubbish situation that i wish wasn't. but it is what it is and i have to do whatever is best

let me know what u think

PS: i'm just being honest in my opinion and giving my thoughts without hiding - please feel free to tell me off (as well as giving advice)

EDIT: will the issue of the deposit protection EVER come up?? would the council for some reason ask for it?? if taking the tenant to court, then will the courts ever require proof in some way??

thanks


john

JuicyJesus

johnjameson wrote: »

question: what if i return her deposit after?

You are reliant on her not knowing the law. The S21 will not be valid in law unless the deposit is protected or it has been returned in full before the S21 is issued.

If she challenges this (and out of self-interest she might, due to what I'm about to say next) she could take you to court and win up to three times the original deposit amount.

johnjameson

@juicyjesus thanks for the advice
let's say the tenant doesn't try to take things further
would the deposit question ever come up otherwise?

Yorkie1

The council have advised her that she needs to be in receipt of a s.21 notice and then have been evicted. Otherwise they will treat her as being intentionally homeless and therefore won't help her.

In order to successfully evict her, you will need to prove to the judge that you served a valid s.21 notice.

Which brings us back to the point that you must return the deposit before issuing it.

The only way you may be able to avoid these consequences is if the council puts in writing to your T that they will treat her as homeless upon the receipt of the s.21 notice, as opposed to the eviction notice from the court. This is unlikely given their current stance.

Mr_Pitiful

johnjameson wrote: »

would the deposit question ever come up otherwise?

It comes up on the N5b form (Accelerated possession), if you follow that route you can't avoid the question which asks if a deposit was paid.

On a separate note, where in the country is the property, as your tenants plan of getting a council house at the end of this process may well not happen, as going down the homeless route is not a guaranteed route to social housing anymore. They may find themselves back in a private rental.

johnjameson

@yorkie, the letter from the council states that a section 21 must be served + that the tenants needs to be evicted

proving a section 21 was served: can this be an email? or does it need to be a registered or recorded delivered letter?

i guess, the short answer is giving back the deposit and then issuing the section 21

the rent is due on the 26th of every month
let's say i return the deposit tomorrow
if the tenant doesn't pay rent, then i can serve a section 8?

question: how long does it take to evict for non rent payment?
(this won't happen - as i said, the tenant has been very decent and honest. but heck, people change over night!)
and... ok: that may be a how long is a piece of string question... but if i knew what the best and worse case situations where,t hat would help my thinking

question: i've seen in section 21 templates other text that are guide for the tenant and landlord - are these required to be in there?? seems silly, but they're in all templates

thanks for everything guys

johnjameson

Mr_Pitiful wrote: »

It comes up on the N5b form (Accelerated possession), if you follow that route you can't avoid the question which asks if a deposit was paid.

but then if i pay the deposit back, is that not kind of cheating??

Mr_Pitiful wrote: »

On a separate note, where in the country is the property, as your tenants plan of getting a council house at the end of this process may well not happen, as going down the homeless route is not a guaranteed route to social housing anymore. They may find themselves back in a private rental.

hmm.... well... i would imagine one of the *worst* places to try and get council housing...
answer: newham

Werdnal

You fail to understand. For the S21 notice to be VALID you MUST return the deposit before you issue the notice. Otherwise the notice is null and void and will not be able to be used to evict her - the council will tell her to ignore it and the courts will not evict her on the basis of an invalid notice.

Section 8 notice will not work in her favour with the council, as being evicted for non payment of rent means she has caused her eviction, ie she is intentionally homeless, and the council will not rehouse her.