Tenancy deposit scheme dispute

maggiecon

I have just been contacted by the tenancy deposit scheme I use, saying that my extenants have raised a dispute asking for their deposit back.

The tenants in question where a nightmare they never paid rent on time and at one point were over £1000 in arrears, things came to a head in February as I was so stressed out all the time trying to deal with them that I sent them a notice to quit and they moved out at the end of April. I was contacted today by the scheme saying they wanted their full deposit back. They left owing £668 in rent and the deposit was for £300. Am I correct in assuming that I can keep the deposit to cover unpaid rent. This is the same tenant who also recently sent me a solicitors letter looking to claim off my insurance because she was drunk and fell last October and somehow that was my fault!! She tried the same stunt with her last landlord too.

Any advice on how to proceed. I responded to the dispute stating that she was entitled to £0. they said it now goes to dispute resolution but I have to give them the £300 to hold whilst the dispute is on-going. Does anyone know how long this process can take? I really cant afford to give them £300 to hold onto, even if I do eventually get it back.

benjus

What does the tenancy agreement say about using the deposit to cover rent arrears?

Handing over the money that's in dispute is a standard part of the process, I'm afraid. It's still the tenant's money until you can demonstrate you have a valid claim over it.

maggiecon

benjus wrote: »

What does the tenancy agreement say about using the deposit to cover rent arrears?

Handing over the money that's in dispute is a standard part of the process, I'm afraid. It's still the tenant's money until you can demonstrate you have a valid claim over it.

We didn't sign a formal tenancy agreement, there was just a rent book, in which I recorded any cash payments they gave me.

G_M

maggiecon wrote: »

We didn't sign a formal tenancy agreement, there was just a rent book, in which I recorded any cash payments they gave me.

:eek:

You are joking, surely? Sorry - the tenant may have been 'a nightmare' but you were kind of asking for it really!

I suggest
* you read the depsoit scheme's dispute procedure
* you then follow the procedure
* you submit evidence of the rent that was due (hmmmm... no tenany agreement....ouch!)
* you submit a rent account showing what rent was paid
* you prove what rent arrears exist

Did you know the tenant had tried the 'falling over drunk' scam on the previous LL when you granted the tenancy? If yes, why on earth did you go ahead? If not, how exactly did the previous LL respond to your reference enquiry?

If you cannot afford £300, you should not be letting out a property. I trust you are now selling, not letting again. You need far more than that as a contingency fund. If the boiler needs fixing, you can't tell your tenants "Sorry, I only have £200 available and the new boiler is £1000, so you'll have to wait till next year".

Nightmare landlord methinks.

theartfullodger

No tenancy agreement?? Then no you can't keep deposit for rent arrears (tenancy agreement would need to say you could), you need to sue through courts for that- which with no tenancy agreement could be a difficult one. Is the rent-book complete, up-to-date & signed by both of you on each week & do you hold it?

Presumably no inventory, no condition report, no photos from move-in and/or move-out? If so the tenant will almost certainly get all deposit back...

Talk about an own-goal....

Anything else you "didn;t bother with"?? Gas safety certificate? Safe electrics?? Rental income (even if making a loss) declared to HMRC?? Permission to let out from mortgage company??

Suggest you try a course like...
http://www.landlords.org.uk/advice-support-tips/courses/nla-foundation-course-attendees-are-eligible-nla-accreditation

What reason did tenant's solicitor offer to justify that it was your fault?

maggiecon

I just wanted to come back and give an update on this, for landlords or tenants who might have to go through a similar process.

Firstly, with regards the tenancy agreement, I left it with the tenant to sign prior to them moving in but they did not sign it. However, I took sick during the time they were moving in and was off work for several weeks and was too ill to pursue them to sign the tenancy agreement. Thankfully I had agreed the rental amount and deposit via email with the tenant and I retained all email correspondence.

The deposit was with TDS, I am not sure if all the tenancy deposit schemes are the same so I can only provide details of their process. They gave the landlord 10 working days to provide evidence for why they should be entitled to retain the deposit. I submitted a copy of the email correspondence and a schedule of the payments received from the tenants which highlighted the £700 deficit when they moved out.

Then the tenant was given 10 days to submit their evidence. I received the adjudicators decision a week later. Which found in my favour stating that I was entitled to keep the full deposit.

The one thing I didn't like about the process is that there is no come back on the decision and you cannot submit additional evidence once the decision has been made. The issue I have with this is you do not get to see what evidence the tenant submits and therefore you cannot defend anything that is untruthful. My tenant lied a lot, thankfully the adjudicator found in my favour as they could not back up their lies with evidence. Regarding the landlords evidence, I am not aware if the tenant is allowed to see this or not. Maybe someone else can clarify? What I have learnt is that what ever reason you claim you are entitled to keep the deposit or have it returned you must provide evidence.

I would also ask that people on this forum should refrain from providing advice when they do not know the answer. TheArtfullodger stated that "No tenancy agreement?? Then no you can't keep deposit for rent arrears " This is wrong. And to go from asking a simple question to more a less being accused of being a slum landlord who doesn't pay tax is a bit absurd.

Hopefully this info will help highlight the process to other landlords and tenants.

theEnd

Seems a reasonable outcome, but I'm a little surprised you got the money back. Did the emails include the tenancy agreement and an indication they'd agreed (if not signed)?

But on an early note, if the boiler did pack in, what would you do if you have no money?

jjlandlord

theartfullodger wrote: »

No tenancy agreement?? Then no you can't keep deposit for rent arrears (tenancy agreement would need to say you could)

That's not correct.

A tenancy deposit is a security for all the obligations of the tenant under the tenancy.

saverbuyer

Sounds like a Northern Ireland tenancy??

Completely different beast to a GB one.

You have been very lucky here. If it went to court, I’m not sure the result would be the same.

anselld

theEnd wrote: »

Seems a reasonable outcome, but I'm a little surprised you got the money back. Did the emails include the tenancy agreement and an indication they'd agreed (if not signed)?

The rent book itself is a rental agreement ( at least all the ones I have seen are).

In any case a legal tenancy can still be created even if there is no written agreement.

anselld

saverbuyer wrote: »

You have been very lucky here. If it went to court, I’m not sure the result would be the same.

I actually think the OP may have done better in court. Sounds like the OP had sufficient to prove tenancy and £668 arrears so they could well have been awarded more than the £300 deposit. Against a court order the TDS would release the £300 leaving the L to enforce CCJ for the remaining.