Insurance Deposit Scheme Challenge

LJB179

Hello, Apologies if this is covered in one of the previous threads, however, my friend is having a tough time with his former landlord and I am unsure how he can resolve it. Essentially, his former landlord, based in China, kept his security deposit via the Insurance Deposit Scheme and is now refusing to return it, having claimed for damage. There is no damage and the final photos taken confirm this, so no doubt he would win if the matter was to be taken further. The question is how he takes it forwards from here without losing money to the court system? He said that he thinks if he was to involve the small claims court that he could only recoup the original deposit from the insurer and not any of the fees associated with the process of claiming itself. Any help is appreciated! Please also note that she has also been sued for not paying the letting agency a full year of fees, totalling around £6k, however, as she is based over the other side of the world it seems that she is almost untouchable!

anselld

Court is not necessary, that is the whole point of the deposit scheme.  He just makes a claim via the scheme using the details he has been given.

LJB179

anselld said:

Court is not necessary, that is the whole point of the deposit scheme.  He just makes a claim via the scheme using the details he has been given.

Thanks, I thought this was the case also, however, he said that the insurer requires court orders to make the payment back. Is this not the case? He was quite sure, as the letting agency actually also instructed him to do this.

RAS

Speak to the scheme provider not the letting agency. Letting agents often know very little about tenancy law, and even less about deposit schemes.

anselld

Which deposit scheme is it?

LJB179

anselld said:

Which deposit scheme is it?

It is the insurance scheme. I believe that many landlords use this to accrue interest on the sum and avoid repaying the balance at the end.

anselld

LJB179 said:

anselld said:

Which deposit scheme is it?

It is the insurance scheme. I believe that many landlords use this to accrue interest on the sum and avoid repaying the balance at the end.

There are three insurance schemes, DPS, TDS and MyDeposits.  They all have slightly differing procedures, hence why I asked.  And no, none of them offer any advantage to the Landlord to avoid repaying at the end and any interest is greatly outweighed by the fee the Landlord pays to insure with them.

Jumblebumble

LJB179 said:

anselld said:

Which deposit scheme is it?

It is the insurance scheme. I believe that many landlords use this to accrue interest on the sum and avoid repaying the balance at the end.

I think there may be some confusion here
The insured scheme enables the Landlord to keep hold of the money and has many advantages apart from the premium but that is only £30.00 for the length of the tenancy or so and is tax deductible 
If the tenant dies there is no problem
If the tenant skips and bilks the rent  there is no problem
If the letting agent goes bust and disappears there is no problem

The Landlord of course has to pony up the deposit if all is left in order

dimbo61

" accrue interest on the deposit " 
Sorry most businesses and current accounts don't pay any Interest and many charge for each transaction so when DD/SO are paid in or bills paid out.
 " If the Tenant dies it's a Massive problem as only the Tenant ( Now deceased ) or the courts can end a tenancy "
I am sure the deceased family and friends will be more than happy to pay the rent till it's sorted out !
 " If the Tenant skips and does not pay any rent for MONTHS they still have a tenancy until the Tenant ends it or the Landlord goes to court and gains possession ( 12/18 months later ) 
I am sure the 5 weeks deposit will cover that ?
Your right about Lettings Agents going bust while holding £ thousands of pounds in deposits and rent but the Landlord is still responsible for repaying the deposit at the end of the tenancy.
To the poster.
You need to get back into the deposit scheme which will refund you the deposit.
If no joy with them then take the LL to court and you will win.
The LL may live in China but they have a valuable asset in the UK ! The property you lived in 

LJB179

dimbo61 said:

" accrue interest on the deposit " 
Sorry most businesses and current accounts don't pay any Interest and many charge for each transaction so when DD/SO are paid in or bills paid out.
 " If the Tenant dies it's a Massive problem as only the Tenant ( Now deceased ) or the courts can end a tenancy "
I am sure the deceased family and friends will be more than happy to pay the rent till it's sorted out !
 " If the Tenant skips and does not pay any rent for MONTHS they still have a tenancy until the Tenant ends it or the Landlord goes to court and gains possession ( 12/18 months later ) 
I am sure the 5 weeks deposit will cover that ?
Your right about Lettings Agents going bust while holding £ thousands of pounds in deposits and rent but the Landlord is still responsible for repaying the deposit at the end of the tenancy.
To the poster.
You need to get back into the deposit scheme which will refund you the deposit.
If no joy with them then take the LL to court and you will win.
The LL may live in China but they have a valuable asset in the UK ! The property you lived in 

This was my advice to them, as the insurer would need to pay out if the LL refused, as long as the deposit scheme gave the green light on inspection.