Advice please - really worried about deposit protection

Landlady2015

I've had tenants in one of my properties since 2010, originally managed by a letting agent.

The tenants are leaving in two weeks and they have demanded the return of their full deposit asap.

I didn't know this but the letting agent registered the deposit 5 months late and the tenants are saying they didn't receive any prescribed information, just a deposit certificate from the DPS with the LA name and address on.
I took over management of the property after the initial 6 month tenancy which then carried on as a SPT. No new tenancy was agreement was signed.

I understand they can sue me for late compliance but there is something else i'm worried about because the tenants are furious that the old LA still hold the deposit in their DPS account.
I agreed with the LA that they could continue to control the deposit because I don't use the DPS, I use a different scheme.

Will I get in trouble for this? The LA has had this deposit in their DPS account for 4 years even though I have no contract with them and they are not connected to the property or the tenancy. I used them for years previously and I didn't really think of the consequences of doing this at the time.

Any advice please? If this ends up with the tenants taking me to court for late compliance will the fact that the deposit and certificate is in the old LA account result in me getting into more trouble?

G_M

Yes you have an issue but no it's not as bad as you fear.

As landlord, it is ultimately your responsibility to comply with the law so you are liable for the late registration of the deposit, and the failure to provide the Prescribed Information.

Of course, if your contract at the time with the agent made them responsible for this on your behalf, then you could claim any loss (eg if a court imposes a late registration penalty on you) from the agent for breach of contract.

And since the deposit was registered 4 years ago (albeit late) the court is likely to impose a penalty closer to 1 times the deposit rather than 3 times.

I don't see that it matters what name the deposit is registered in. For convenience, it would have been smarter to get the deposit transferred into your name when you stopped using the agent, but so far as the tenant is concerned, what matters is
* the deposit is registered, so arbitration is available to them if required and
* the depsoit is released in a timely fashion - which will depend on you liaising with the agent and them cooperating with you.

anselld

Mistakes have been made (late protection and lacking PIs) and you will/ may need to deal with that, but that doesn't give the T sudden rights to be furious or overly demanding.

They still need to demonstrate that the property is vacated in an adequate condition and they should get back deposit less damages consistent with the checkout and DPS process timescales.

The immediate problem you do have is if you are relying on s21 for posession it has been invalidated by late protection. If the T have served notice that is not a problem however.

amiehall

anselld wrote: »

Mistakes have been made (late protection and lacking PIs) and you will/ may need to deal with that, but that doesn't give the T sudden rights to be furious or overly demanding.

They still need to demonstrate that the property is vacated in an adequate condition and they should get back deposit less damages consistent with the checkout and DPS process timescales.

The immediate problem you do have is if you are relying on s21 for posession it has been invalidated by late protection. If the T have served notice that is not a problem however.

This surely cannot be true. I've always read non-protection means no valid S21 not late protection. Otherwise the OPs tenants could live in the property indefinitely without eviction threat. It would be ridiculous...

T0mmyh

amiehall wrote: »

This surely cannot be true. I've always read non-protection means no valid S21 not late protection. Otherwise the OPs tenants could live in the property indefinitely without eviction threat. It would be ridiculous...

Just return the deposit.. Serve s21... Simples

anselld

amiehall wrote: »

This surely cannot be true. I've always read non-protection means no valid S21 not late protection. Otherwise the OPs tenants could live in the property indefinitely without eviction threat. It would be ridiculous...

Well that is the case since 2012.

Following late protection the right to serve s21 can only be regained by...
returning the deposit in full,
returning the deposit less deductions agreed with the T, or,
following Court settlement decision on non-protection penalty claim.

anselld

T0mmyh wrote: »

Just return the deposit.. Serve s21... Simples

Indeed. Although I am not sure what would happen if the T decided to frustrate that by not complying with the DPS repayment process, refusing to give bank details, etc, etc.

marliepanda

anselld wrote: »

Mistakes have been made (late protection and lacking PIs) and you will/ may need to deal with that, but that doesn't give the T sudden rights to be furious or overly demanding.

They still need to demonstrate that the property is vacated in an adequate condition and they should get back deposit less damages consistent with the checkout and DPS process timescales.

The immediate problem you do have is if you are relying on s21 for posession it has been invalidated by late protection. If the T have served notice that is not a problem however.

This is untrue. The entire deposit needs to be returned. If the LL needs money for damages he will need to go to court/ask nicely. The whole deposit is due back

Landlady2015

Thank you for replying.

I've been frantically googling for this scenario regarding the deposit certificate and it being held in the LA account. The only information I can find is that the LA details can be used when acting on behalf of the LL in relation to the tenancy. It's just that there is no longer a contract between us in relation to the tenancy or the property.

The tenant gave notice after we disagreed over a rent increase so section 21 isn't an issue.

They seemed to have kept the property in good condition and I've had no concerns during inspections. No rent arrears etc.

I'm just not happy to return the deposit before the final checkout in case there is something that needs attention. That's what it is there for after all.

Lord_Baltimore

Landlady2015 wrote: »

I'm just not happy to return the deposit before the final checkout in case there is something that needs attention.

And besides, you may need their money to pay their claim for late compliance if they pursue one

Landlady2015

But they signed the tenancy agreement that says the deposit will be returned to them after they vacate, not before.
They are demanding I return it before they leave.