Help please :( - Tenancy Deposit system/fines

scrabblers

Hello

I am a landlord and am being threatened by tenants for huge fines after a genuine mistake on this scheme. I am really worried, torn between thinking it can't be right and scared that it may be from googling … any experience / knowledge much appreciated.

As briefly and honestly as I can:
- I have rented out a house for many years, always complied with everything, including the new deposit protection legislation when introduced. It's a student house so rentals autumn-autumn. ish.
- last year I protected the deposit and posted the certificate and info with the inventory to the new tenants. I have a copy of that letter but not proof of posting.
- unfortunately I then had a very rough few months of pressure and ill health and was away a lot. My bad, I a) didn't clock that the certificate and inventory hadn't been returned, and b) messed up returning previous year's deposits to old tenants.
- long story short, the scheme refunded to the old tenants and recovered it from me (which I paid as soon as I was aware) in the spring
- in August I tried to log on to scheme's site and protect this (incoming) year's deposit. They had cancelled my membership. I called them and explained my circs and they said I could rejoin which I did, with a view to protecting this new deposit (for tenants incoming next week)
- The tenants who have just moved out have generally been pretty good but in last couple of months got behind with rent. I chased and one got in touch to ask me to agree to something on the contents, and withheld rent until I agreed it was OK - which I didn't. I sent him an email saying if he didn't make up the rent before moving out I would deduct from deposit (all legit, and more than patient as could have chased before).
- He then contacted with a threatening email to say they'd never got an inventory and had found out the deposit had been unprotected since March. If I couldn't provide proof of reprotection in March they will sue me for the deposit and fine (1-3 x the deposit).
- Stupidly I hadn't clocked when my membership was cancelled that this deposit would have been unprotected. I protected it that day but that was just before they moved out …

SO. I am now in a position of being about to return their deposit to them (14 days after end of tenancy). What I'm wondering is:
- IF they did pursue me and this went to court, would the fact that the deposit had been inadvertently unprotected for a few months in the tenancy (and the inventory/info apparently not received) seriously mean a court could order me to pay them the deposit again plus a huge fine?
- Is there any advantage to me in not returning the deposit now, in this context? It will mean it gets unprotected again but presumably it would be enough to be able to show the court I reprotected it as soon as aware albeit late?
- There are some legit deductions from the deposit (same professional inventory clerk did checkout report) and interest on the late payments of rent. I'm thinking of writing to them to say this is what I'm withholding and then write them a separate letter saying if they confirm they will not pursue me for technical breach I'll waive the deductions. This obviously might encourage them to think they have a chance, which I hope they don't, but a) it would save a lot of time and hassle and b) they might …

Views hugely appreciated - I'm feeling very stupid, but they are also clearly just trying something on for what could be some easy cash (mse I guess but …)

Thanks in advance

libf

Doesn't matter if it was inadvertent or not, the deposit was unprotected. So it boils down to whether or not you think they will go through with their threats of court...

scrabblers

Thanks. I appreciate the response - and that my stupidity isn't an excuse. But would it make no difference that it was protected at the start and for much of the tenancy? And if they had had their deposit back by the time they went to court?

HappyMJ

scrabblers wrote: »

Thanks. I appreciate the response - and that my stupidity isn't an excuse. But would it make no difference that it was protected at the start and for much of the tenancy? And if they had had their deposit back by the time they went to court?

If it was protected but just protected late the penalty won't be as bad as you think. That's if your tenants decide to take further action.

Personally I wouldn't bother trying to claim for minor things such as the interest on the late payment of rent. You can if it's in your tenancy agreement but you don't want to upset them now and I bet it isn't all that much.

scrabblers

Thanks, much appreciated - and I love your avatar!
It was protected on time - although they have now said they didnt get the inventory and the certificate/info was with that, but the scheme records show it was protected on time. It then unfortunately got unprotected after about half the year and then (when I realised) was reprotected very late.

I'm with you - gut says give them back the whole deposit, but I just wonder if the threat that a couple of hundred might be deducted but they can get it back guaranteed now might dissuade them from going to court on the chance they'll get a lot more? (but might not as it was protected at the start and reprotected) ...

His_Dudeness

If you complied with the requirements on time (and can prove it) but the deposit was unprotected then re-protected before the tenancy ended... Then IMHO all bets are off when it comes to predict what a court would decide.

Indeed, arguably this case is not one that makes you liable for any penalty.

scrabblers

Thanks HD … should I go ahead with returning the deposit as normal (which will trigger unprotection but I'm thinking it'd be better for the thing to have been protected and unprotected than to still be hanging onto their deposit by the time it came to court?)?

theartfullodger

The tenant (if more than one they are all-together "the tenant") can sue you any time up to 6 years from when it should have been protected. So return deposit, be helpful & flexible then pray to any god you have (or none...).

The "it was an honest mistake" has about as much weight as it would if you were doing 45 in a 30mph zone... but you behaviour & attitude may help. Depends on that particular judge if & when it gets to court.

scrabblers

Thanks artful … they can even sue if it was protected right at the start, unprotected (by mistake) and then reprotected and returned to them? … so they have no loss ...

marliepanda

scrabblers wrote: »

Thanks artful … they can even sue if it was protected right at the start, unprotected (by mistake) and then reprotected and returned to them? … so they have no loss ...

Yes. Otherwise what would be the point in the law? Landlords could protect for a month, remove 'by accident' then re protect later on.

scrabblers

Thanks marliepanda. I don't understand what landlords could gain by doing this … the deposit being unprotected doesn't advantage me at all… ??