Forgot to do do deposit protection schemeion

Shocksl

Hi guys 

I wonder if someone can help me. 

My sister was abit naive and didn't understand the rules properly. 

She did set up the deposit protection scheme for a house she was letting.

However she forgot to give the prescribed information to the tenant. 

As she has to sell the house due to affordability issues and the damage caused to the property by the tenant. She served a section 21 to the tenenant in order for the tenenant to have notice to leave.

My sister has now received a letter from the tenants solicitor requesting for an obsene amount of money for failing to provide the tenenant with the prescribed info. They have requested 40 x more than the deposit. 

What can my sister do now. She tried to contact a solicitor but the solicitor is charging alot of money that my sister does not have.

Is this going to be a costly affair? 

Shocksl

It will also be worth noting when she set up the protection scheme at the time. She did protect the deposit. She just didn't provide the tenant with the prescribed info. 

canaldumidi

If she did not send the Prescribed Information within 30 days (or 14 depeding on date of tenancy start) then

a) S21 will be invalid unless the full deposit is first returned and the S21 re-issued AND

b) the tenant could claim the penalty of 'up to' 3 times the deposit and at least 1 times. Given the deposit was protected, the court would likely award the lower amount.

Alternative might be to 'bribe' the tenant to leave (tenant requests Early Surrender in return for cash). Is that what the solcitor is suggesting? But there's no guarantee they won't later claim the penalty (b above) as they have 6 years to do that.

They have requested 40 x more than the deposit.

Absurd. Ignore. Don't even reply.

Post 3: Deposits: Payment, Protection and Return.

Shocksl

canaldumidi said:

If she did not send the Prescribed Information within 30 days (or 14 depeding on date of tenancy start) then

a) S21 will be invalid unless the full deposit is first returned and the S21 re-issued AND

b) the tenant could claim the penalty of 'up to' 3 times the deposit and at least 1 times. Given the deposit was protected, the court would likely award the lower amount.

Alternative might be to 'bribe' the tenant to leave (tenant requests Early Surrender in return for cash). Is that what the solcitor is suggesting? But there's no guarantee they won't later claim the penalty (b above) as they have 6 years to do that.

They have requested 40 x more than the deposit.

Absurd. Ignore. Don't even reply.

Post 3: Deposits: Payment, Protection and Return.

Thank you so much for that. 

To be honest the solicitor hasn't advice anything yet. She was just gob smacked with the cost of solicitor fee.

 Can all this be done with a solicitor?  How would she go about it? 

newsgroupmonkey_

canaldumidi said:

If she did not send the Prescribed Information within 30 days (or 14 depeding on date of tenancy start) then

a) S21 will be invalid unless the full deposit is first returned and the S21 re-issued AND

b) the tenant could claim the penalty of 'up to' 3 times the deposit and at least 1 times. Given the deposit was protected, the court would likely award the lower amount.

Alternative might be to 'bribe' the tenant to leave (tenant requests Early Surrender in return for cash). Is that what the solcitor is suggesting? But there's no guarantee they won't later claim the penalty (b above) as they have 6 years to do that.

They have requested 40 x more than the deposit.

Absurd. Ignore. Don't even reply.

Post 3: Deposits: Payment, Protection and Return.

And let's not forget that just because the tenant got the deposit back and maybe 1x on top, it doesn't stop your sister countersuing.
Quite honestly though, this sounds like a "professional" tenant. This should be going through small claims court at best where solicitors fees (I believe?) aren't allowed to be claimed. So the tenant will have to swallow that.

If your sister really is in that much money trouble, I'd suggest that she sells the place as is, with tenant in situ.

saajan_12

Shocksl said:

Hi guys 

I wonder if someone can help me. 

My sister was abit naive and didn't understand the rules properly. 

She did set up the deposit protection scheme for a house she was letting.

However she forgot to give the prescribed information to the tenant. - did she provide the tenant's contact details where needed and provide the certificate? Those would at least help the tenant get the benefit of the protection if there's a dispute. Also did she provide all the other docs eg gas cert, EPC, EICR, how to rent booklet..?

As she has to sell the house due to affordability issues and the damage caused to the property by the tenant. She served a section 21 to the tenenant in order for the tenenant to have notice to leave. - can she sell with the tenant in situ? Would limit the market to investors and hence might achieve a lower price, but on the flip side, would avoid the  upfront costs of evicting and rental void while on the market to sell. 

My sister has now received a letter from the tenants solicitor requesting for an obsene amount of money for failing to provide the tenenant with the prescribed info. They have requested 40 x more than the deposit. - can you quote what they said and the amounts involved? 40x seems crazy, so maybe they have some justification. Are they offering to leave early too, rather than wait through court etc?

What can my sister do now. She tried to contact a solicitor but the solicitor is charging alot of money that my sister does not have. - she doesn't necessarily need a solicitor, but then she needs to be careful with exactly whcih criteria have been fulfilled to ensure the S21 is successful next time. 

Is this going to be a costly affair? 

There's two issues: 
1) Eviction:
The current S21 will be invalid. She needs to return the deposit, check the other criteria are fulfilled (eg gas, EPC, EICR) and send another S21 notice (2 month clock restarts). Then once the 2nd notice expires, she can apply to court for a possession order, and wait for bailiffs to evict. This could take approx 4-8 months. The court costs can be claimed from the tenant (provided the LL wins, so not if she makes a mistake and has to go to court twice). 

2) Penalties:
Due to the failure to serve PI, the tenant can claim a penalty in the amount of 1-3x deposit. Since the deposit was protected and if you return it as above, then the tenant hasn't really suffered due to this technical breach, so I expect the penalty would be at the lower end of the scale ie 1x deposit, but ultimately this is up to a judge. Note this is in addition to returning the actual deposit. 

So ballpark overall costs would be:
- 1x deposit return (would be returned anyway minus damages, which she can counterclaim for so not really a loss)
- 1x deposit penalty
- court fees £few 100 each time, some of which will be claimable from the tenant

Shocksl

Would the above require a solicitor or could this be done by herself?

Lastly its come to my attention the tenant has. Left the property. However my sister hasn't returned her deposit due to the damage. 

saajan_12

Shocksl said:

Would the above require a solicitor or could this be done by herself?

Lastly its come to my attention the tenant has. Left the property. However my sister hasn't returned her deposit due to the damage. 

Could be done by herself if she's careful with the next steps. 

By left the property, we need to be clear exactly what this means as it changes things. When did the tenant leave, are there any belongings left, were there any discussions or mutual agreements about leaving? 

Ideally, sister would agree with the tenant and document that the tenancy is being mutually terminated, even if that's mid period. Then the S21 issues and court becomes less of an issue. 

You still have the penalty issue for not serving PI - to minimise this, the LL should send a clear outline of any deductions and info on how to dispute via the scheme, to make it clear that she is not trying to unfairly withhold the deposit or deny the tenant from the benefits of the deposit scheme. The tenant can still claim the penalty upto 6 years later, but hopefully the actions I suggest will make it to the lower end of the scale. Withholding the deposit entirely with no explanation will send the penalty up. 

andrewjb3

One comment is that if, say, you've signed a new tenancy every 6 months, and they've been there for 5 years then there are potentially 10 tenancies that you've failed to protect. So you might be looking at 10x the deposit or more etc.

canaldumidi

No need for a solicitor provided she researches things and does it properly, especially ensuring the next S21 is valid.

This link below will help. It's very detailed though note the one thing missing is it has not been updated since the requirement for an electrical inspection was introduced. If she has not got an EICR the S21 will again be invalid:

S21 checklist (Is a S21 valid?)

Any solicitor costs she incurs will be hers and cannot be claimed in small claims court even if she wins.

Lastly its come to my attention the tenant has. Left the property. However my sister hasn't returned her deposit due to the damage. 

Be very careful. 'Leaving the property' may not = 'ending the tenancy', so any rash action like changing the locks could be interpreted as an illegal eviction.

Has the T communicated about leaving in any way? Returned the keys? Left a message and if so saying what exactly? Are there any of T's possessions left behind? Read

https://www.landlordzone.co.uk/information/abandonment/

My advice would be to either

*  try to reach an agreement to have the T formally in writing surrender the tenancy, perhaps in return for a modest cash incentive (not 40 times deposit!). Do this vie the T not the solicitor. Accept the risk of the penalty being claimed later - it will be 1 times (or max 2 times) the deposit.

* return deposit in full, go through checklist above, and serve new S21. Again no need for solicitor if she's careful. But accept the long timescale (2 months + wait for court date = 2-4 months, + maybe wait for bailiffs)

* Use moneyclaim online to claim for damage to the property

* Is rent owed? If yes, serve S8 Notice. If 2 months arrears use G8 (see Schedule 2 here), if less use G10 or 11. Better still use all 3. This is quicker than S21.

theoretica

Is the 40 x just what the tenant is asking for the missing paperwork?  Or for leaving promptly? 

How much could your sister afford to pay the tenant, rather than the expensive and slow hassle of going through the courts, or the potentially reduced value of selling the property tenanted.

Actually, that would be a question to ask estate agents - how much less would she get selling the property with tenant, than vacant possession?

Section 8 also has grounds for when the tenant has damaged the property - how bad does this need to be to be likely to be granted?