Failure to protect tenants deposit

tobyj

Three years ago, I rented out my flat to two separate tenants, taking deposits from each but foolishly not placing into a deposits scheme.
My council has contacted me asking me to provide them with several pieces of documentation for the property, one of which is "Tenancy Deposit Scheme Paperwork".
I have a reasonable relationship with both tenants and want to do the right thing (albeit a few years late). I am aware that if I am taken to court, I will be made to pay 1-3 times the deposit as compensation

I've searched the internet and some people say that it's better late than never, to stick the money in the scheme now ( the tenant is made aware) or to return the deposit (https://helix-law.co.uk/property-law-blogs/i-didn-t-protect-my-tenant-s-deposit-in-time-what-should-i-do-now/).

Looking for advice.

Many thanks.

Toby

Onemanandtwolittleladies

Probably the only thing you can do, contact the tenants, apologise and grovel for your oversight then protect.

martindow

Why has the council contacted you? Possibly they have been informed that your house has tenants and that they have a registration scheme or HMO regulations that you should have complied with. It seems strange that they have taken it upon themselves to worry about deposits being put in a scheme or not.

Smodlet

I wonder if your tenants may be forumites or otherwise have become aware of the need for their deposits to be protected. I'd get on that first thing...

tobyj

I am not sure why the council has reached out - it does feel a bit weird that they would do that, is that common practise? We paid the Council to enrol in a scheme so that we could rent the property out.
Since this morning we have placed their deposits in a protection scheme.

Thanks for all your replies.

theartfullodger

If you missed something that obvious(**) wonder what else you missed - eg no GSC or EPC served with proof of service so likely al s21 invalid. Best you check - against eg..
https://nearlylegal.co.uk/2018/10/section-21-flowchart-now-with-grey-areas/


** I'm thinking of when I started as a landlord & ended up granting a tenancy with no option for s21 equivalent, in Scotland: Painful, long-drawn out & expensive. I then resolved to start learn

Smodlet

I know this is a propos of nothing but why can people not just call, write or otherwise contact these days? Why does everyone have to "reach out"? Surely that is what one does while contemplating jumping off a cliff, not while dealing with whether or not deposits are protected.

And breathe.

diggingdude

what compensation are the tenants getting to encourage them to agree to you just popping it into the scheme now?

00ec25

diggingdude wrote: »

what compensation are the tenants getting to encourage them to agree to you just popping it into the scheme now?

i would hope none because it would not remove their right to sue for non protection anyway

steampowered

As you have missed something so obvious, I wonder what else you have missing.

Have you been declaring your rental income to HMRC and complying with the requirements around gas certificates etc.?

It sounds like you need to realise you are running a business and start understanding what your legal obligations are, urgently.

It sounds like the best thing to do is to protect your tenants' deposits now, to at least reduce the chance of being ordered to pay the top of the range (3x) penalty. You should probably pay any interest accrued on the deposit to your tenants.

G_M

* I would want to understand why the council are involved. Yes,the tenants could take legal action and claim the penalty from you, but it seems that as yet they have not,,,,,
* Is this Scotland? Wales? Or one of the English councils that require landlord registration? If not sure - check council website
* Whatever you do, the T's remain able to make a claim. However you can reduce any penalty by either returning the deposit or potecting it before they do.
* assuming England I would protect the deposit asap. You say you have a good relationshipwith the Ts, so I would talk to them, come clean, and explain what you are doing. If they are awkward about it, offer to return the deposit instead. Do this face to face if possible and don't forget the cake.
* what other documentation has the council asked for?


Have a read of this to see what else you may have missed.......:


* New landlords (1):advice & information :see links in next post

* New landlords (2): Essential links for further information