Return of Lodger's Deposit

dj03943

Good afternoon,


I would be grateful for some advice regarding a lodger's deposit, following a decision of one of my lodgers to leave with minimal notice.


I rent out two rooms in my house to lodgers. The larger room rents for £400 per month with a £500 security deposit. In December I took on a new lodger for this room. We agreed a minimum 6-month term, but no contract was signed and nothing was put in writing. No notice period was formally specified.


After 3 months the tenant decided to move out, giving just 4 days notice. He had paid in full for the 3 months that he stayed. Since moving out, the tenant has requested I return in full his £500 deposit. I have advised that, due to the minimal notice and my failure to find a new lodger for the room until next month, that I will be keeping £400 of the deposit (equal to one month rent). My reasons for this are the failure to give adequate notice (at least one month) and failure to stay for the minimum 6 month term that was verbally agreed.


The lodger has now sent me a 'letter before action' advising that if the deposit is not returned in full then he will take court action to recover the monies.


I would like to know if my actions as described above are considered reasonable and lawful. Am I entitled to withhold the majority of the deposit or not? Any advice is much appreciated.

Comms69

dj03943 wrote: »

Good afternoon,


I would be grateful for some advice regarding a lodger's deposit, following a decision of one of my lodgers to leave with minimal notice. - what does minimal notice mean? Because to me that is "the minimum notice we agreed and I just hoped for more?"


I rent out two rooms in my house to lodgers. The larger room rents for £400 per month with a £500 security deposit. In December I took on a new lodger for this room. We agreed a minimum 6-month term, but no contract was signed and nothing was put in writing. No notice period was formally specified. - Well no offence, but that was pretty stupid. All you have is your word!


After 3 months the tenant decided to move out, giving just 4 days notice. He had paid in full for the 3 months that he stayed. Since moving out, the tenant has requested I return in full his £500 deposit. - seems reasonable, unless there was some damage? I have advised that, due to the minimal notice and my failure to find a new lodger for the room until next month, that I will be keeping £400 of the deposit (equal to one month rent). -you think you have the legal standing to do that? (you don't) My reasons for this are the failure to give adequate notice (at least one month) and failure to stay for the minimum 6 month term that was verbally agreed. - You just said no notice was agreed further up.... (not formally specified)


The lodger has now sent me a 'letter before action' advising that if the deposit is not returned in full then he will take court action to recover the monies. - Smart person


I would like to know if my actions as described above are considered reasonable and lawful. Am I entitled to withhold the majority of the deposit or not? Any advice is much appreciated.

The lodgers certainly seem to be.
Yours I would be more wary.


I cant see a judge siding with you without an agreement. Afterall it was for your benefit to have one...

dj03943

Comms69 wrote: »

The lodgers certainly seem to be.
Yours I would be more wary.


I cant see a judge siding with you without an agreement. Afterall it was for your benefit to have one...

Minimal notice means he left with 3 days remaining on his third month. He had paid until 3rd March but gave notice on the 28th Feb.


No, there was no damage to the room when he moved out.


This isn't what I hoped to hear but it looks like I will have to return the deposit and learn from this for future rentals! Thanks for your advice.

G_M

* the 6 month contract (in itself pretty unwise for a lodger contract, but that's another matter) is disputable, given that you have no written contract (again - stupid). So it is his word against yours as tto whether this was actually agreed.

Who would a judge believe in court? Not certain - depends who is most convincng. But as it's an unusual arrangemeent in a lodger contract, the judge mght errr towards believing the lodger.

* 4 days notice seems unreasonable. Where no notice period is agreed (as here) 'reasonable notice' is often deemed to be = to the rent periods. If rent is paid weekly then a weeks notice. If rent = monthly, then a months notice.

So assuming he pays monthly, I would retain a months rent, less the 4 days notice he gave you.

But there is no guarantee the court will rule in this way.

As an aside, why people let strangers intto their homes without clear understandings of the terms under which they are doing so, and without clear house-rules too, is beyond me. We see it again & again here!

Comms69

G_M wrote: »

* the 6 month contract (in itself pretty unwise for a lodger contract, but that's another matter) is disputable, given that you have no written contract (again - stupid). So it is his word against yours as tto whether this was actually agreed.

Who would a judge believe in court? Not certain - depends who is most convincng. But as it's an unusual arrangemeent in a lodger contract, the judge mght errr towards believing the lodger.

* 4 days notice seems unreasonable. Where no notice period is agreed (as here) 'reasonable notice' is often deemed to be = to the rent periods. If rent is paid weekly then a weeks notice. If rent = monthly, then a months notice.

So assuming he pays monthly, I would retain a months rent, less the 4 days notice he gave you.

But there is no guarantee the court will rule in this way.

The problem is ofcourse if the lodger just claims it was 3 months, which as you say would be more likely in absence of any other written agreement.

dj03943

G_M wrote: »

* the 6 month contract (in itself pretty unwise for a lodger contract, but that's another matter) is disputable, given that you have no written contract (again - stupid). So it is his word against yours as tto whether this was actually agreed.

Who would a judge believe in court? Not certain - depends who is most convincng. But as it's an unusual arrangemeent in a lodger contract, the judge mght errr towards believing the lodger.

* 4 days notice seems unreasonable. Where no notice period is agreed (as here) 'reasonable notice' is often deemed to be = to the rent periods. If rent is paid weekly then a weeks notice. If rent = monthly, then a months notice.

So assuming he pays monthly, I would retain a months rent, less the 4 days notice he gave you.

But there is no guarantee the court will rule in this way.

Many thanks for your advice. So you would consider it legal for me to retain the months' rent, less 4 days? If it went to court, the judge may look favourably upon my actions?

Comms69

dj03943 wrote: »

Many thanks for your advice. So you would consider it legal for me to retain the months' rent, less 4 days? If it went to court, the judge may look favourably upon my actions?

You have to appreciate the word 'legal' has no basis here.


It's not an offence for you to do so. You aren't going to be arrested.


Are you going to win? Honestly no-one can tell you with 100% certainty, as G_M put it - it's whoever the judge finds more convincing.


Ultimately do you want the hassle of going to court and arguing the case? Are you capable of doing so?


It's a calculated risk. Sometime people issue a letter before action but then move on, other times they issue court proceedings and then you are taking time off work and spending your evenings building a legal defence.

Cheeky_Monkey

As it's your own fault that no written lodger agreement exists, I would suggest that you don't keep £400 of his deposit as it may well be a big enough sum to encourage him to continue to pursue the matter through the Court.

However, I think you could probably keep say, £100 (a week's rent) in which case it probably wouldn't be worth his while taking you to Court for such a small sum but, ultimately, it's your choice.

Presumably, he gave you back his house key when he moved out didn't he?

G_M

Cheeky_Monkey wrote: »

Presumably, he gave you back his house key when he moved out didn't he?

Picking up that point, I'd say it's irrelevant. You should change the lock each time there's a change of lodger as a matter of course. Keys are easy and cheap to copy....

Keep the old lock to use next time a lodger leaves.

G_M

dj03943 wrote: »

So you would consider it legal for me to retain the months' rent, less 4 days? If it went to court, the judge may look favourably upon my actions?

Nothing illegal about retaining it.

As for the judge's decision, I gave only my opinion, based on the facts you presented.

The judge will also hear the lodger's side, which may differ.

Plus judges can be unpredictable anyway.

Cheeky_monkey makes some sensible points - compromises are often better than legal action.

Cheeky_Monkey

G_M wrote: »

Picking up that point, I'd say it's irrelevant. You should change the lock each time there's a change of lodger as a matter of course. Keys are easy and cheap to copy....

Keep the old lock to use next time a lodger leaves.

It's hardly irrelevant if he kept the key and could potentially walk back in at any time :eek:

Not everyone has the foresight to change the lock after every lodger.