Being taken to court by tenants despite offering to return deposit in full.

vincentvega27

Hi there,

I´m a joint owner of a property which we let out. The tenants left the property with various things needing cleaning an repairing. We took a small amount from their deposit to go towards our costs to fix it. My partner did not put the deposit in a scheme which obviously was stupid of us. After they mentioned court action we have offered to pay back the remainder of the deposit to avoid unnecessary stress. They are now demanding we pay this back plus 37 percent of the entire amount which amounts to an extra 700ish quid. If not, they´ll go to court. Have we got any way out of paying this extra amount? Or is the best course of action to suck it up and learn from our mistakes going forward?

I´m wondering, given we have offered to pay back the original deposit in full, and have evidence of the damage to the property, how strong is their case against us to get over the original deposit amount as compensation in court?

Thank you kindly.

HampshireH

Pay back the deposit as a whole (the court will demand this anyway) it's not an offer it is an obligation.

The court will also likely award between 1-3 x the deposit amount in compensation.

They are asking for 37% instead of 1 x the deposit?

I'd be concerned you pay now and they take you to court anyway if not done properly so any payment needs to be fully documented to outline what it is for. That said realistically a court is likely to award at least the value of the deposit in compensation.

Paying would indicate you understand your responsibility now.

If you want to put a counter claim to court for damages you could but is it worth it? (Only you would know)

secla

As said above if it go`s to court they will win you have no defense regardless of any damage caused.
37% seems like your cheapest way out. Out of interest how did they come up with 37% ?

CKhalvashi

This is not a deposit in this case, it's an illegal fee to you as it hasn't been protected.

The offer they have given you likely will be the cheapest way out. The maximum amount they can claim is 3x the deposit in compensation plus costs. I'd consider their offer to be fair, reasonable and just, offering you an opportunity to complete your obligation.

jonnydeppiwish!

CKhalvashi said:

This is not a deposit in this case, it's an illegal fee to you as it hasn't been protected.

The offer they have given you likely will be the cheapest way out. The maximum amount they can claim is 3x the deposit in compensation plus costs. I'd consider their offer to be fair, reasonable and just, offering you an opportunity to complete your obligation.

It’s not a maximum they can claim, rather a maximum a judge ‘could’ award. The minimum a judge would award is 1x (can they award the costs as well?).

As @HampshireH has stated, I’d be worried about the tenant then going to court to claim after they have paid. Could the LL get around this by getting the tenant to sign a disclaimer?

MultiFuelBurner

The good thing is to learn from the mistake.

Have you got new tenants in and have you done the same or lodged the deposit?

CKhalvashi

jonnydeppiwish! said:

CKhalvashi said:

This is not a deposit in this case, it's an illegal fee to you as it hasn't been protected.

The offer they have given you likely will be the cheapest way out. The maximum amount they can claim is 3x the deposit in compensation plus costs. I'd consider their offer to be fair, reasonable and just, offering you an opportunity to complete your obligation.

It’s not a maximum they can claim, rather a maximum a judge ‘could’ award. The minimum a judge would award is 1x (can they award the costs as well?).

As @HampshireH has stated, I’d be worried about the tenant then going to court to claim after they have paid. Could the LL get around this by getting the tenant to sign a disclaimer?

As it's presumably rectified with interest-ish, I'd assume it could be taken as full and final settlement of any liabilities between LL and T.

Paperwork and payment made by bank transfer probably are necessary but I would see little to no risk in that bearing in mind the offer itself seems reasonable.

silvercar

Offer them the remainder of the deposit back  “in full and final settlement”. Tell them you will pursue for damages beyond fair wear and tear if they take it to court. Chances are they will take the rest of their deposit and disappear.

Sounds to me like their extra 37% is a tactic in the hope you will settle for the full deposit being returned. Standard bargaining tactic to ask for more and be prepared to settle for less. Going to court takes time, they may want their deposit back quickly,

propertyrental

You have no defence against the failure to protect the deposit. The court must award the tenant at least 1 x the value of the deposit, and can award up to 3 times. This is a penalty.

It is separate from the deposit itself which you still owe the tenants, less any valid deductions for damage, cleaning etc. Do you have a good inventory with photos to prove the condition of the property when they moved in? And out?

In your position I would accept the offer in full and final settlement. I'm not sure of the legally best way to ensure they don't subsequently claim the penanlty anyway. Maybe ask your Landlords Association, or the Legal Advice line with your landlords insurance?

Or over on https://forums.landlordzone.co.uk/

MattMattMattUK

CKhalvashi said:

This is not a deposit in this case, it's an illegal fee to you as it hasn't been protected.

The offer they have given you likely will be the cheapest way out. The maximum amount they can claim is 3x the deposit in compensation plus costs. I'd consider their offer to be fair, reasonable and just, offering you an opportunity to complete your obligation.

I would hardly see it as "fair, reasonable and just", that a tenet who has suffered no financial loss and has caused damage to a landlords property gets £700 "compensation" because a landlord failed to jump through the hoops correctly. 

Should the landlord have used a deposit scheme? Yes, absolutely. Should the tenant have to pay costs for damage and failing to clean the property properly upon ending the tenancy? Yes, absolutely. Is it "fair, reasonable and just" that the tenant bears no costs for their actions and is unduly enriched to the tune of £700? Absolutely not!

user1977

MattMattMattUK said:

CKhalvashi said:

This is not a deposit in this case, it's an illegal fee to you as it hasn't been protected.

The offer they have given you likely will be the cheapest way out. The maximum amount they can claim is 3x the deposit in compensation plus costs. I'd consider their offer to be fair, reasonable and just, offering you an opportunity to complete your obligation.

I would hardly see it as "fair, reasonable and just", that a tenet who has suffered no financial loss and has caused damage to a landlords property gets £700 "compensation" because a landlord failed to jump through the hoops correctly. 

Should the landlord have used a deposit scheme? Yes, absolutely. Should the tenant have to pay costs for damage and failing to clean the property properly upon ending the tenancy? Yes, absolutely. Is it "fair, reasonable and just" that the tenant bears no costs for their actions and is unduly enriched to the tune of £700? Absolutely not!

It's "just" given what the law says. Whether it's what the law ought to say is a different and rather academic question...