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

badgermog

greatcrested said:

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Of course, in the event that the tenancy was ended and a new one created, then your deposit should have been withdrawn from the deposit scheme, and the new tenant's deposit registered afresh in a scheme,so, as Hasbeen asks above, was you deposit protected, and was the deposit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

I believe my tenancy was ended by mutual agreement here. There was no deed of assignment involved and the new tenant got his own contract and had to pay his own deposit. No fee was agreed as part of the early surrender, so can I claim the whole £200 back?

greatcrested

badgermog said:

greatcrested said:

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Of course, in the event that the tenancy was ended and a new one created, then your deposit should have been withdrawn from the deposit scheme, and the new tenant's deposit registered afresh in a scheme,so, as Hasbeen asks above, was you deposit protected, and was the deposit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

I believe my tenancy was ended by mutual agreement here. There was no deed of assignment involved and the new tenant got his own contract and had to pay his own deposit. No fee was agreed as part of the early surrender, so can I claim the whole £200 back?

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.

saajan_12

Arguably, changing the end date is a variation. Further, there is another permitted fee for early termination, where genuine losses can be charged. I could easily see the below actual costs could add up to at least half of the £200 
* new deposit registration fee
* references 
* additional check out + check in

Those plus the hassle of dealing with a changeover instead of just sitting and collecting the rent, I wouldn't begrudge them £200 while you're saving the rent for half a tenancy. 

AdrianC

badgermog said:

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

No, just do it FIRST.

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!

If he did not provide you with the prescribed information within the first 30 days of your tenancy, then he cannot claim one single penny of your deposit, even if you leave the place a smoking ruin.

https://www.gov.uk/tenancy-deposit-protection/information-landlords-must-give-tenants

(But he can still go after you for any damages through the courts)

badgermog

saajan_12 said:

Arguably, changing the end date is a variation. Further, there is another permitted fee for early termination, where genuine losses can be charged. I could easily see the below actual costs could add up to at least half of the £200 
* new deposit registration fee
* references 
* additional check out + check in

Those plus the hassle of dealing with a changeover instead of just sitting and collecting the rent, I wouldn't begrudge them £200 while you're saving the rent for half a tenancy. 

Thanks for your input here, interesting to see the other viewpoint. From what I can make of the Tenancy Fees Act June 2019, there is indeed a fee allowed for things like early termination if the landlord so wishes, though the legislature seems to be clear that a reasonable fee is £50 and that anything more than this should be clearly evidenced. I can't really see how my landlord could manage that, given that he did not have to advertise or deal with an agent to find a new tenant, and a reference check costs about £20-£40 these days. What did you mean by additional check out/in? What are the specific costs involved to the landlord here? (Particularly given that the new tenant moving in was done remotely and he didn't actually have to meet the landlord or anyone in person).

I appreciate that my landlord agreed to end my tenancy early if I found a replacement, which is why I was happy to do all the legwork there. But now that bit is over, I don't see why that legally entitles him to take a whole £200 from my deposit? I also feel like this is an odd way of seeing things: "I wouldn't begrudge them £200 while you're saving the rent for half a tenancy" when legally, a deposit belongs to a tenant until the landlord can provide evidence for why they're making deductions. My LL agreed to let me out of the tenancy early if I found another tenant, that was our agreement there. Why should it then be held over me for the sake of £200? At this time in my life, that is actually quite a lot of money to me.

Perhaps there really are valid reasons that he can come up with, but the situation so far it looks like he's just trying it on for a couple of hundred. It doesn't exactly strike me as decent landlord behaviour that he failed to give me the prescribed info on the deposit, he made deductions without any negotiation/agreement, and he made an incorrect calculation in his favour for the pro rata rent owed. 

badgermog

AdrianC said:

badgermog said:

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

No, just do it FIRST.

Thanks, good advice. Will get back on the phone to them now.

AdrianC

badgermog said:

AdrianC said:

badgermog said:

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

No, just do it FIRST.

Thanks, good advice. Will get back on the phone to them now.

No, just reclaim it online from the deposit scheme.

saajan_12

badgermog said:

saajan_12 said:

Arguably, changing the end date is a variation. Further, there is another permitted fee for early termination, where genuine losses can be charged. I could easily see the below actual costs could add up to at least half of the £200 
* new deposit registration fee
* references 
* additional check out + check in

Those plus the hassle of dealing with a changeover instead of just sitting and collecting the rent, I wouldn't begrudge them £200 while you're saving the rent for half a tenancy. 

Thanks for your input here, interesting to see the other viewpoint. From what I can make of the Tenancy Fees Act June 2019, there is indeed a fee allowed for things like early termination if the landlord so wishes, though the legislature seems to be clear that a reasonable fee is £50 and that anything more than this should be clearly evidenced. I can't really see how my landlord could manage that, given that he did not have to advertise or deal with an agent to find a new tenant, and a reference check costs about £20-£40 these days. What did you mean by additional check out/in? What are the specific costs involved to the landlord here? (Particularly given that the new tenant moving in was done remotely and he didn't actually have to meet the landlord or anyone in person).

By additional check in / out I mean compiling the inventory and damages reports, getting quotes etc. In your 6 months, there should have been 1 check in + 1 check out. Instead, they had your check in + out and the replacement tenant's check in + out. These are costs of business but usually averaged over at least the initial fixed term, not repeated a month or two later. OpenRent charge £85 for the inventory, which sounds eminently reasonable - I've done these manually a few times and it takes ages to take comprehensive photos, organise and label them, go through with tenant by email, agree any amendments etc. Your check out may have been quicker due to the short time you stayed, but the check in still needs redoing to ensure all photos are up to date. 

badgermog said:

I appreciate that my landlord agreed to end my tenancy early if I found a replacement, which is why I was happy to do all the legwork there. But now that bit is over, I don't see why that legally entitles him to take a whole £200 from my deposit? I also feel like this is an odd way of seeing things: "I wouldn't begrudge them £200 while you're saving the rent for half a tenancy" when legally, a deposit belongs to a tenant until the landlord can provide evidence for why they're making deductions. My LL agreed to let me out of the tenancy early if I found another tenant, that was our agreement there. Why should it then be held over me for the sake of £200? At this time in my life, that is actually quite a lot of money to me.

Perhaps there really are valid reasons that he can come up with, but the situation so far it looks like he's just trying it on for a couple of hundred. It doesn't exactly strike me as decent landlord behaviour that he failed to give me the prescribed info on the deposit, he made deductions without any negotiation/agreement, and he made an incorrect calculation in his favour for the pro rata rent owed. 

Yes you did a large part of the work in finding the tenant, but that wasn't everything involved. With any property I help manage for a LL, I usually encourage them to price competitively, so finding a tenant is generally quick and the lion's share of the work is after this.. back & forth dealing with documents, right to rent checks, references, tenancy signing etc. A reference report can be obtained inexpensively (not £0) but those just dump (often incomplete) information. It still takes time to ask for correct documents, discuss the circumstances and evaluate income, CCJs, past LLs opinions, etc etc. 

To me at the start the LL had a contractual right to hassle free rent income, other than property repair issues. Now they have an extra changeover, for which you have partly done the legwork. I would think the 'fair' thing would be to recompense for the costs + time for the remaining legwork. 

Having said that, what's fair is irrelevant. Legally, it depends on what you mutually agreed. i.e. whether the LL agreed finding a replacement and rent until then was ALL that was needed. Was the clause mentioning fees in the tenancy specifically amended? I'd expect the default to be fees still apply unless the was a subsequent ".. and no fees" agreed. Note if there was no meeting of the minds on the surrender, then the default is you continue paying rent. 

badgermog

saajan_12 said:

By additional check in / out I mean compiling the inventory and damages reports, getting quotes etc. In your 6 months, there should have been 1 check in + 1 check out. Instead, they had your check in + out and the replacement tenant's check in + out. These are costs of business but usually averaged over at least the initial fixed term, not repeated a month or two later. OpenRent charge £85 for the inventory, which sounds eminently reasonable - I've done these manually a few times and it takes ages to take comprehensive photos, organise and label them, go through with tenant by email, agree any amendments etc. Your check out may have been quicker due to the short time you stayed, but the check in still needs redoing to ensure all photos are up to date. 

Ok, makes sense. Apart from the £85 part - it was just one room I was renting so inventory/photos would need to be done for that only. Perhaps there are professional services charging £85 for that, but then why does the law state that only £50 is a reasonable fee to include this sort of thing? 

I do think that you're talking sense here and you sound like somebody who does things properly. I would say I'm more just annoyed at my landlord for going about things this way when he is the opposite - a sloppy landlord. My inventory was sub par when I moved in, I had to hash it out with the agent at the time who wasn't happy about me wanting more than some hand scrawled sheet with half the items on it. I'm pretty sure based on the speed I was originally able to move in there myself that a credit check wasn't actually done, the LL just wanted to see I had proof of regular employment through paychecks. I can't imagine there was any sort of different efforts to these made for the tenant taking my place. The LL was unresponsive to repairs that needed doing around the flat so we had to make do ourselves, and I would guess that he left bills unpaid as there were often letters from the water/electricity to the flat in his name. 

So yes, I think you're probably right that £200 costs can and do get incurred if a LL is running a tight ship. 

saajan_12 said:

Was the clause mentioning fees in the tenancy specifically amended? I'd expect the default to be fees still apply unless the was a subsequent ".. and no fees" agreed. Note if there was no meeting of the minds on the surrender, then the default is you continue paying rent. 

The clause in question states that any amendments to the tenancy result in a £200 fee. No it wasn't amended, but the amusing thought crosses my mind that if it were, then that would count as an amendment that could be charged £200 for! I guess the legal question I am interested in is whether or not being replaced by a new tenant constitutes an amendment. You say yes, others say no. It has also been raised elsewhere here that a tenant's deposit can't be touched if correct procedure hasn't been followed regarding the deposit PI.

I'm not sure what counts as a meeting of minds on the surrender. I was told that if I found another tenant to take my place then I would be released from the tenancy early. There is also a clause in the contract which states this, making no mention of fees. I'm not sure if that legally means anything, but you would think that if a LL wanted to charge fees for early exit then that would be detailed in this very clause.

badgermog

badgermog said:

So yes, I think you're probably right that £200 costs can and do get incurred if a LL is running a tight ship. 

Meant to say here - I don't think this is my LL at all, which is kind of why the £200 fee is so grating. He wanted to do none of the hard work of being a LL but is happy to collect fees when he can. If I'm honest I think there's no way he's done any of the things whatsoever which would incur expense and that he simply wanted to leverage £200 from the annoyance of having to sort out another tenant so soon.