delay in rental deposit return

bigjluk

my friend has a house he let out for 12 months to the one person,this person was a friend and paid one and a half months rent as a deposit,along with a month in advance.at the end of month 10 the tenant gave 2 months notice of leaving.my friend did not hold the deposit in one of 3 statutory deposit schemes,as he was unaware of these,and he needed the deposit topa for new carpets prior to the friend moving in.during the tenancy my friend encountered work problems with payment.when it came to the tenant moving out ,my friend could not pay back the deposit instantly,its 3 months down the line,and my friend is getting threatened with court action( he is being told he will have to repay 3-4 times the deposit back by the tenant).my friend has told the tenant one month more and he can pay it back(although he is very unhappy with the state the house was left in,dirty carpets,plaster damaged on walls,garden overgrown as it was never cut).how does the land lie for my friend.

RAS

Assuming England and Wales, even if he pays it back immediately there is nothing to stop the tenant suing for up to 3 times the deposit.

However the quicker he returns it the smaller any penalty is likely to be.

And of course he is also facing the possibility of a CCJ which will not do much for his credit rating.

He needs to make repayment an absolute priority.

Next time, secure the deposit properly and send the prescribed information within 30 days.

benjus

Your friend has been pretty stupid not to research any of the legal aspects of being a landlord and is now suffering the consequences. The tenant's threat of court action for 3x the deposit as compensation may well just be a tactic to get him to return the deposit.

Best course of action is to return the deposit, in full, NOW, and hope that the tenant is satisfied and drops the threat of court action.

Werdnal

Your friend's tenant has a very valid claim and will likely succeed in getting the full 3x plus the original deposit, plus the court will award court fees (which for non-protection cases can be around £1K) against the LL.

Your friend's ignorance of the law is not an excuse - deposit protection regs have been in force since April 2007 and there is a wealth of information around that your friend could have researched. Whilst we are at it, what else did your friend not know about - did he get mortgage consent to let, gas safety certs, declare rental income to HMRC? If he has been ignorant of one aspect of being a landlord this often runs hand-in-hand with other laspes and the tenant could have a field day reporting him for all the other things he may have failed to do!

Using the deposit to buy carpets - this is getting more unbelievable by the second. The deposit is the tenant's money, and should not be spent on anything other than losses or damage proven to be the tenant's fault at the end of the tenancy.

Your friend may think he cannot afford to pay back the deposit now, but he should expect the full weight of a deposit non-protection claim (plus anything else the tenant digs up against him) to be heading his way very soon!

Paying back the full deposit now, might sweeten the court in your friend's favour, but tenant can still claim even if the original amount is returned in full.

Did he prepare a full and through inventory detailing the condition of the property and every room, its contents, decor, flooring etc? If not, he will have no proof of the state the property was left is was worse than the start, so even if he had protected the deposit correctly, there would be no evidence to claim anything from the tenant in lieu of this.

Your friend sounds like a total amateur - fail to prepare, prepare to fail!!!!

Guest101

The tanant is 100% right, your friend is in it waist deep. Better get out before he finds his head below water.

Pay, and hope the tenant doesnt sue, because they still can for 6 years after the tenancy.

aggypanthus

I read that the tennant can only sue within 3 months of expiry of lease, with regard to the deposit not being protected?

Guest101

aggypanthus wrote: »

I read that the tennant can only sue within 3 months of expiry of lease, with regard to the deposit not being protected?

Where di you read that? Everywhere i've read its 6 years.

Werdnal

Please give us a link to this - if its online it may be out of date as the rules change in the Localism Act, although I have never seen 3 months quoted. Are you sure its not Scotland as they have only recently introduced deposit regs and their rules differ considerably.

I believe in England/Wales it is actually 6 years from the failure to protect the deposit, so if the tenancy is 12 months, and the deposit needed to be protected within 30 days of its start, so 6 years from that point to be able to bring a claim.

Kynthia

The deposit was the tenant's money and not a fund for your friend to use to cover his own expenses. The tenant has every right to expect the prompt return if their own money, less approved deduction, once they move out. They are also entitled to sue if the law was broken.

The Shelter Scotland site does indicate that tenants only have 3 months to apply to the sheriff but that is different to England and Wales where the time is much longer.

aggypanthus

Yes, It is Scotland rules to which I refer . It was I think on C Advice or shelter site.