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

Grizebeck

You will lose this case 
Just settle and get it all confirmed in writing 

doodling

Hi,

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!

The landlord owes the tenant their deposit back plus somewhere between 1 and 3x their deposit in compensation for their failure to comply with the law, i.e. a total of between 2x and 4x the deposit.  The tenant owes the landlord for any damage they have done to the property.  The two should be netted off against each other and payment made accordingly.  The tenant has therefore borne the cost of any damage.

Feel free to lobby your MP if you don't like the law, but previous experience before that law was brought in suggested that it was landlords who were more likely to rip off tenants than vice versa.

The current law seems appropriate - it avoids creating regulations that need to be enforced by overstretched enforcement agencies and gives tenants a small measure of power over landlords that don't follow the rules.  The only cost is some burden on tenants themselves (to actually take legal action) and the civil courts.

[Deleted User]

You need to also consider if you are non compliant with any other laws, of which there are many. Self management can be a steep learning curve. Using a letting agent might help to avoid these pitfalls but they are not all competent. In the scheme of things its a very reasonable settlement if full and final.
 

ProDave

secla said:

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% ?

Really?  So taking a deposit is a complete waste of time if a court can order it's return in full even if there is genuine damage caused by the tenant.

CKhalvashi

ProDave said:

secla said:

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% ?

Really?  So taking a deposit is a complete waste of time if a court can order it's return in full even if there is genuine damage caused by the tenant.

That's not the case though if it's properly protected.

The issue here is that the deposit wasn't properly protected. The law in general will see this as a deposit not being taken.

BikingBud

ProDave said:

secla said:

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% ?

Really?  So taking a deposit is a complete waste of time if a court can order it's return in full even if there is genuine damage caused by the tenant.

But that is not what is being suggested. Do not conflate the 2 obligations as they are seperate 

Simply:

• The landlord did not protect the deposit - fault > penalty between 1 and 3 times deposit. Let's say 3x deposit
• Tenant did not leave the property is an acceptable state (check in + reasonable fair wear and tear) > Fault > penalty cost may be within deposit but LL able to sue for costs over and above deposit. Lets say 0.5x deposit

Net result might be that 1.37 times deposit paid to tenant leaves LL in a fair position or not, only the LL know the costs to mediate the property but if only 0.5x deposit then given they could try and recover that via other routes, they could be up on their overall liabilities by (2.5 -1.37) x deposit.

There will likely be costs that make this even less worthwhile chasing. 

theartfullodger

vincentvega27 said:

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.

It is profoundly amazing that landlords (I presume two of them) are unaware that a tenant may go after a penalty of up to 3x deposit after all this time.

The law covering this has been passed TWICE by parliament, 2nd time to give poor overworked landlords twice the time to do the small amount of admin. TWICE the time.  The first one a 2004 Act - so it's hardly new news.

Wonder what other bits of paperwork are not done perfectly... (there's quite a few...)

Vincent: How much training in how to be a landlord have you and your partner done, please?? (or is this a wind up...)

It's not "compensation" it's a penalty for landlords not complying with the law. I'm in favour of landlords complying with the law: And agents (good luck..): And tenants...

Artful: Landlord since 2000.  

I do hope my agents have handled deposits correctly..........

saajan_12

HampshireH said:

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

secla said:

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% ?

Incorrect. The return of the deposit is a separate action and can certainly be defended if there are sufficient damages beyond fair wear & tear. 

The 1-3x penalty (not compensation) is indeed indefensible. I'd expect somewhere in the middle since its more than a paperwork issue as the deposit wasn't protected at all, but at the same time the LL wasn't trying to run away with the deposit, but did offer to return a majority. 

For the net of the two claims, paying the full deposit is an offer to settle, as is the Tenant's offer of 137% (full return + 37%). You can accept, negotiate or let it go to court. If the latter, then you can claim the full amount of provable damages, but does involve the effort of proving, going to court etc.