Help DPS Dilemma

sivs

Hi, i’m hoping someone can help me. I’ve got an issue with a tenant who has left without paying his final months rent however he’s claiming i have not protect his deposit correctly.

Bit of history, he originally signed a joint tenancy his relationship deteriorated with his co-tenant so she left in May 2019.The deposit is protected by the DPS and he is the lead tenant. When the co-tenant moved out his refused to release the deposit as she apparently owed money for bills. He carried on with the tenancy and a few months later I queried the deposit situation, he confirmed he’d repaid her back her share of the deposit so this didn’t need to be returned. I tried to contact the co-tenant but could get an answer.

In November 2019 he had a friend move in and they signed a joint tenancy, again we spoke about the deposit and he confirmed his friend had paid him and he was happy to leave to deposit in the original scheme as he was the lead tenant.

It turned out that he has not returned the deposit to the original tenant and never spoke about the deposit to his friend. It also appears he was subletting the property from May 2019 - November 2019 which is not allowed.

He’s refusing to pay the last months rent and got a solicitor to write to demand his share of the deposit back claiming, i’ve not protect his deposit properly. In my eyes i couldn’t have done more.

Sorry about the long post.

Semple

Was a while since we rented, but i'm sure we had some sort of a receipt from DPS to show that our deposit was held by them. Do you have something similar? 

princeofpounds

sivs said:

 In my eyes i couldn’t have done more.

Well, you could have done a proper job as a landlord with check-ins and -outs for each separate tenancy, and not apparently delegated management of the deposit to one of your own tenants.

Some clarifications please - you say 'lead tenant'; is that only for the purposes of the deposit, or is he the sole tenant for the property with the co-tenants being his lodgers?

What exactly does his solicitor claim is wrong? 

sivs

I have access to the DPS website which shows when the deposit was created and the payment received so this shows the deposit was protected from the start of the tenancy. 

The issue is he solicitor is claiming it was not protected correctly when the second tenancy was setup but as he was not willing to release the deposit in the first place i’m not sure how i could have done that.

princeofpounds

sivs said:

I have access to the DPS website which shows when the deposit was created and the payment received so this shows the deposit was protected from the start of the tenancy. 

The first tenancy. You have multiple tenancies here and appear to have treated them like they all blend into one another for deposit purposes. Did you make both the staying tenant and the new tenant sign a new agreement at the start of the second tenancy? You need to give an accurate timeline to be sure of what you actually did.

sivs said:

The issue is he solicitor is claiming it was not protected correctly when the second tenancy was setup but as he was not willing to release the deposit in the first place i’m not sure how i could have done that.

One tricky question here is whether a deposit was even actually paid for the second tenancy. The deposit in the scheme relates to the first tenancy. He can claim that back if he likes, presumably. Was there even anything to protect?

The way you should have done it was demand the payment of a new deposit - it's a new tenancy after all - which you could have then protected. If he didn't want to release the old deposit to fund it, that would have made it his problem, not yours.

sivs

princeofpounds said:

sivs said:

 In my eyes i couldn’t have done more.

Well, you could have done a proper job as a landlord with check-ins and -outs for each separate tenancy, and not apparently delegated management of the deposit to one of your own tenants.

Some clarifications please - you say 'lead tenant'; is that only for the purposes of the deposit, or is he the sole tenant for the property with the co-tenants being his lodgers?

What exactly does his solicitor claim is wrong? 

Thank you - i did do check in at the start of the tenancy, the issue is when the girl moved out and he (the lead tenant) who haS  to action the deposit refused too. Claiming i have not protected the deposit when a new tenancy was setup. However i took the lead tenants word that the deposit had been repaid to the old co tenant and he had received the share of the deposit from his friend.

the deposit was fully protected throughout the tenancy and still is. 

sivs

princeofpounds said:

sivs said:

I have access to the DPS website which shows when the deposit was created and the payment received so this shows the deposit was protected from the start of the tenancy. 

The first tenancy. You have multiple tenancies here and appear to have treated them like they all blend into one another for deposit purposes. Did you make both the staying tenant and the new tenant sign a new agreement at the start of the second tenancy? You need to give an accurate timeline to be sure of what you actually did.

The lead tenant stayed and the girl left early May, he then moved his friend in November and they signed another agreement, however no deposit was setup. As he was the lead tenant, I wrongly assumed it would be ok. Plus he was not prepared to release the deposit anyway.

sivs said:

The issue is he solicitor is claiming it was not protected correctly when the second tenancy was setup but as he was not willing to release the deposit in the first place i’m not sure how i could have done that.

One tricky question here is whether a deposit was even actually paid for the second tenancy. The deposit in the scheme relates to the first tenancy. He can claim that back if he likes, presumably. Was there even anything to protect?

The way you should have done it was demand the payment of a new deposit - it's a new tenancy after all - which you could have then protected. If he didn't want to release the old deposit to fund it, that would have made it his problem, not yours.

I understand that now but I took his word for it and assumed It was ok as he is a lead tenant. 

saajan_12

Ultimately, one deposit was paid for the initial tenancy and once deposit was protected. Re the number of tenancies, either 

A) There was a new sole tenancy after the co tenant moved out, and a new joint tenancy after the friend moved in. --> But then there was no deposit paid to you for the subsequent tenancies so nothing to be protected. You're late in repaying the original deposit so should return that asap and can't claim the current rent against the deposit for an old tenancy, but there's no issue of non protection. OR

 B )  If there was one long tenancy, which was just varied for the changing tenants, then the deposit has been protected throughout. It was in the correct amount and listed one of the tenants (I don't think you can even list more than one tenant). It should be returned once the tenancy ends and everyone moves out (after deductions if any). 

I think A is more likely, as with B the variations would usually be done via deed, but the actions of all parties might suggest this was the reality. 
Either way, I don't see any penalty being due. 

sivs

saajan_12 said:

Ultimately, one deposit was paid for the initial tenancy and once deposit was protected. Re the number of tenancies, either 

A) There was a new sole tenancy after the co tenant moved out, and a new joint tenancy after the friend moved in. --> But then there was no deposit paid to you for the subsequent tenancies so nothing to be protected. You're late in repaying the original deposit so should return that asap and can't claim the current rent against the deposit for an old tenancy, but there's no issue of non protection. OR

 B )  If there was one long tenancy, which was just varied for the changing tenants, then the deposit has been protected throughout. It was in the correct amount and listed one of the tenants (I don't think you can even list more than one tenant). It should be returned once the tenancy ends and everyone moves out (after deductions if any). 

I think A is more likely, as with B the variations would usually be done via deed, but the actions of all parties might suggest this was the reality. 
Either way, I don't see any penalty being due. 

Thank you so much, you are correct the deposit was paid for the first tenancy and this has been protected correctly, I will arrange for this to be returned. No deposit was collected for the second tenancy, I did not need to protect this, so the only way to claim back the lost rent would be through the courts.

greatcrested

When the change of tenants took place you had two options:

1) allow the original tenancy to continue, and assign the incoming tenant to the obligations of the departing tenant, via a Deed of Assignment. The deposit (which was already protected) thus did not need to be returned (since the tenancy was continuing. The incoming tenant would pay the outgoing tenant their share of the deposit, and the Deed would specify that the incoming tenant was now entitiled to the (protected) deposit.

2) end the original tenancy, complete normal check-out routines, return the deposit. Create a brand new tenancy, take and protect a new deposit.

You did not apparantly do either of the above, which has left you with a legal mess......