Landlord has made a deduction from my deposit, how legal is it?

badgermog

Hi, I’m sure variants of this question come up often but I wanted to run my specific situation past the forum. It’s in England if that makes a difference.

I signed a 6 month contract on a flat, starting the rental period from September. I then had to move out due to personal circumstances before the end of the month (bummer), so I let the landlord know and we agreed I would find another tenant to take my place. I did so and the new tenant moved in at the start of Dec; I continued paying the rent whilst it was vacant during Oct and Nov so as not to break contract. Now, after delaying for a while the landlord finally got back to me about the deposit last week and said it would be returned. It came through the other day and it was almost half my deposit back. I questioned this and have received the following response:

"Your rent was paid until 05/12/2020. ***** who took your room over, commenced his contract on the 7th of Dec which leaves us with £31.23 of outstanding pro rata rent between the end of your contract and start of his.

As per your contract we have to charge you £200 for making changes to it, i.e. signing your lease over to someone else.

The total knocked off of your deposit amounts to £231.23.

Your deposit of £475 less £231.23 equals to £243.77 which has been transferred to your account."

So it's largely an admin type fee which he has imposed. I can see how the pro rata rent I am entirely liable for, but the fee seems excessive. There IS a sentence in the contract which states “any changes, alterations and reviews of this contract are subject to an admin fee of £200”, but I did not imagine that it would be invoked seeing as the landlord has no real need to (other than greed) — he has lost exactly zero money here if I let him take the pro rata rent deduction. There was no mention of deposit deductions at any point in the negotiation with the landlord of finding someone else to take my place before leaving.

I’m wondering if I can somehow push back in terms of simply explaining how this is not legal (but I don’t actually know), or if it’s worth me pursuing the idea that the deposit was never protected (I can find no record of it with the deposit protection scheme mentioned in the contract)....or if it’s all just a lost cause at this point?

Hasbeen

badgermog said:

Hi, I’m sure variants of this question come up often but I wanted to run my specific situation past the forum. It’s in England if that makes a difference.

I signed a 6 month contract on a flat, starting the rental period from September. I then had to move out due to personal circumstances before the end of the month (bummer), so I let the landlord know and we agreed I would find another tenant to take my place. I did so and the new tenant moved in at the start of Dec; I continued paying the rent whilst it was vacant during Oct and Nov so as not to break contract. Now, after delaying for a while the landlord finally got back to me about the deposit last week and said it would be returned. It came through the other day and it was almost half my deposit back. I questioned this and have received the following response:

"Your rent was paid until 05/12/2020. ***** who took your room over, commenced his contract on the 7th of Dec which leaves us with £31.23 of outstanding pro rata rent between the end of your contract and start of his.

As per your contract we have to charge you £200 for making changes to it, i.e. signing your lease over to someone else.

The total knocked off of your deposit amounts to £231.23.

Your deposit of £475 less £231.23 equals to £243.77 which has been transferred to your account."

So it's largely an admin type fee which he has imposed. I can see how the pro rata rent I am entirely liable for, but the fee seems excessive. There IS a sentence in the contract which states “any changes, alterations and reviews of this contract are subject to an admin fee of £200”, but I did not imagine that it would be invoked seeing as the landlord has no real need to (other than greed) — he has lost exactly zero money here if I let him take the pro rata rent deduction. There was no mention of deposit deductions at any point in the negotiation with the landlord of finding someone else to take my place before leaving.

I’m wondering if I can somehow push back in terms of simply explaining how this is not legal (but I don’t actually know), or if it’s worth me pursuing the idea that the deposit was never protected (I can find no record of it with the deposit protection scheme mentioned in the contract)....or if it’s all just a lost cause at this point?

What official rental deposit scheme was it supposed to be in?

greatcrested

Has your contract been changed? Or was it ended by mutual agreement, and a new contract signed with the incoming tenant?

If your tenancy simply continued, but a Deed of Assignment was executed by all parties (LL, new and old tenants), with your tenancy being 'assigned' from you to the new tenant, then yes, the £200 admin fee is chargeable since this is a change to your contract.

But if your tenancy was ended, and a brand new one created for the new tenant, then there was no 'change' to your contract and no fee can be charged - unless it was agreed as part of the Early Surrender agreement you and the LL discussed and agreed when you first requested o leave early.

Of course, in the event that the tenancy was ended and a new one created, then your deposit should have been withdrawn from the deposit scheme, and the new tenant's deposit registered afresh in a scheme,so, as Hasbeen asks above, was you deposit protected, and was the deposit registration closed?

See also

Post 3: Deposits: Payment, Protection and Return.

moneysavinghero

If they are saying the £200 is to change the contract, then they are being a bit naughty. They are only allowed to charge a max of £50 to change a contract (unless they can demonstrate that it has actually cost them more than this).

They can however charge for any costs they incur in re-letting the property. You found the new tenant so no advertising costs for him. He could charge you for any referencing fees that he had to pay though.

Hannimal

I thought you were lucky to get anything back after ending the contract early. 

dimbo61

Find out which deposit scheme the deposit was registered with and contact them by phone.
Explain what has happened and see what they say

Hasbeen

badgermog said:

Hi, I’m sure variants of this question come up often but I wanted to run my specific situation past the forum. It’s in England if that makes a difference.

I signed a 6 month contract on a flat, starting the rental period from September.  Now, after delaying for a while the landlord finally got back to me about the deposit last week and said it would be returned. It came through the other day and it was almost half my deposit back. I questioned this and have received the following response:

"Your rent was paid until 05/12/2020. ***** who took your room over, commenced his contract on the 7th of Dec which leaves us with £31.23 of outstanding pro rata rent between the end of your contract and start of his.

So. Op your rented a room in a flat share? and paid a deposit on the room?

badgermog

Thank you for the responses so far, I'll try and clear up all the queries here:
This was a single room which I rented in a flatshare with 3 other individuals. We all came at different times and all have our own independent contracts.

The deposit was supposed to be registered with one of DPS's schemes, I have now confirmed with them that it was indeed registered under the DPS Insured scheme, which apparently means the landlord pays a fee to them and gives them all the relevant details, rather than leaving the whole deposit with them. 

As far as I can tell, my contract was not changed/amended - I came to a mutual agreement with the landlord that I could leave and no longer be liable for rent if I found a new tenant and he accepted the tenant. I did this and a completely new contract was issued to this new tenant. There were never any charges/deductions negotiated or even mentioned when my landlord agreed that I could leave early as long as I found a replacement.

The landlord's company paid the deposit back to me directly after making the deductions. I have never had any notification or correspondence with the deposit protection scheme at any point.

I'm inclined to quote the Tenancy Fee Act of June 2019. From what I can see, this doesn't permit such fees to exceed £50 unless they reflect genuine costs incurred to the landlord AND they are then accordingly itemised and evidenced for me to see. However, is this piece of legislation actually relevant here, or not (seeing as I don't think it is change to the contract, but a mutual surrender before he issued a completely separate contract to someone else)? Basically, in the eyes of the law is this a contractual amendment? Or an early surrender agreement followed by some unnegotiated deposit deductions?

Seashell517

If a deposit scheme was used, then their arbitration process is your first point of call.

badgermog

Yes, I will go through the deposit protection scheme's dispute process if I can't get my landlord to refund me anything here.

Just out of interest, does anyone know if it is a breach of the Housing Act 2004 to not supply the tenant with confirmation of the deposit being protected, regardless of whether or not a scheme was used? It just feels wrong that a landlord can choose what deductions to make without agreeing anything with either the DPS or tenant, and then just chance it to see if he can keep some money.

I wish I had known more about this DPS thing when moving in, I would have been a lot more careful to get all the necessary paperwork!

greatcrested

Seashell517 said:

If a deposit scheme was used, then their arbitration process is your first point of call.

Indeed.

Raise a dispute witht the scheme. That's why the government introduced them. Though trying to resolve directly with the LL first will be quicker and easier if successfull.