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Landlord witholding most of deposit for final month rent that was never placed in protection scheme

Hi There

This is on behalf of my partner who has just moved out of a dodgy short term let.  Basic outline of issues as follows:

Girlfriend moves out of family home into short term let with live in private landlord under an AST.  She moved out of family home due to historic trauma and abuse suffered there exacerbating mental health issues.  She finds a short term let closer to her place of work in a different town.
I warned her about the red flags associated with it but in haste while likely not being 100% mentally there she signs contract and sends deposit.  She pays five weeks rent for security deposit and this goes straight to landlord bank account with landlord admitting in messages to having no intention of using and ultimately never did use a deposit protection scheme.

The AST was for 6 months but girlfriend makes plans to move into a new place by herself she found locally and wishes to end tenancy one month early.  Landlord accepts on the proviso that she will take the final month's rent (900) from her deposit (1125) if a replacement tenant is not found and girlfriend agrees.  Landlord separately finds a couple to rent room girlfriend was staying in for 3 weeks of the final month of girlfriend's tenancy (November) but is refusing to return anymore of the deposit even though the room is being rented to someone else in that month -  in effect frustrating the tenancy agreement and double renting the room for personal financial gain.  Landlord has returned 225 of the deposit so far with 900 outstanding.

In order to not exacerbate mental health strain, girlfriend is willing to accept return of 3/4 of the remaining deposit accepting that for one week of November the room was unoccupied prior to the 3 week occupancy by new short term tenants.  This is in the hope of trying to resolve return of the deposit in a quick fashion (personally I don't hold out much hope and suspect eventual legal action will be required).  A final offer letter is being drafted to be mailed to the landlord's address (landlord has blocked girlfriend through virtual channels) prior to a letter before claim if no resolution. 

Just a few questions re the legalities:
Is the fact the landlord was living at the property an issue with regards to making a claim? Some sources seem to indicate a different state of play with live in landlords.
Should an eventual claim be for the full deposit (plus any penalty) even though some of it was returned (but never protected during the tenancy)?

Thanks in advance

«13

Comments

  • As penny_dreadful says:

    * 'Excluded Occupier' (lodger), not tenant with AST
    * deposit does not need to be protected
    * 6 month contract agreed, so any change to that (ie ending the contract early/reducing the 6 monhs rent due) is by agreement. 
    * LL appeas to have been reasonable and agreed to early surrender of the contract

  • _Penny_Dreadful said:

    As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant. 

    If your partner signed a 6 month fixed term contract then legally the landlord is entitled to 6 months worth of rent from her. There was no requirement for the landlord to find a replacement lodger but it appears the landlord did. Your girlfriend’s only recourse, if she believes she is entitled to the return of more of the deposit, would be to send the landlord a letter before action asking for the return of the money, then if the landlord doesn’t agree for your girlfriend to file a money claim online. I’m not sure which way the court would go because of the 6 month fixed term contract. 
    As penny_dreadful says:

    * 'Excluded Occupier' (lodger), not tenant with AST
    * deposit does not need to be protected
    * 6 month contract agreed, so any change to that (ie ending the contract early/reducing the 6 months rent due) is by agreement. 
    * LL appears to have been reasonable and agreed to early surrender of the contract

    Thank you both.  I suspected this was the case and evidently failed in properly researching this.  Essentially any claim could not use the unprotected deposit point anymore and it essentially falls into the realm of a contract dispute.

    Just a few further points that weren't mentioned/clarified to keep the initial post more concise:
    • The contract GF signed and provided by LL was headed "Assured Shorthold Tenancy" so think this was a source of confusion (tbh LL was a bit clueless and was just renting in order to fund lifestyle - regular payment demands, missed payment warnings and new credit cards for them came through the letterbox on a regular basis.  Seems they had zero money management.)
    • My girlfriend made the decision to move out in part due to her mental health deteriorating as a result in part due to landlord actions.  The flat was poor in terms of cleanliness with LL never cleaning and leaving the place a state and neglecting to care for their dog, leaving GF to clean and look after dog.  LL also had random different men on a fairly regular basis come over and stay with her, which was a minor trigger for GF, given past trauma/abuse from males in her personal life.  Admittedly, other than verbal communication, I'm not sure if GF has written record of raising these grievances with landlord.  GF has been signed off work by GP and occupational health since late October due to mental health problems of which the issues above were a factor in and noted in medical documentation.
    • The agreement with regard to moving out early but still owing rent if no replacement was found was all verbal as far as I'm aware (will double check) and so is not worth paper it was never written on.  I guess the dispute would centre on the original signed contract and wording within which I will check.
    • On a side note LL for the duration of the let was claiming sole occupier discount for council tax and no doubt is continuing to do so.
    Thanks for the points you've raised, MSE forums are always such an excellent resource.  Will discuss with GF, she might just accept this as a learning experience and leave it be for her own wellbeing.

  • See bold comments

    _Penny_Dreadful said:

    As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant. 

    If your partner signed a 6 month fixed term contract then legally the landlord is entitled to 6 months worth of rent from her. There was no requirement for the landlord to find a replacement lodger but it appears the landlord did. Your girlfriend’s only recourse, if she believes she is entitled to the return of more of the deposit, would be to send the landlord a letter before action asking for the return of the money, then if the landlord doesn’t agree for your girlfriend to file a money claim online. I’m not sure which way the court would go because of the 6 month fixed term contract. 
    As penny_dreadful says:

    * 'Excluded Occupier' (lodger), not tenant with AST
    * deposit does not need to be protected
    * 6 month contract agreed, so any change to that (ie ending the contract early/reducing the 6 months rent due) is by agreement. 
    * LL appears to have been reasonable and agreed to early surrender of the contract


    • The contract GF signed and provided by LL was headed "Assured Shorthold Tenancy" so think this was a source of confusion (tbh LL was a bit clueless and was just renting in order to fund lifestyle - regular payment demands, missed payment warnings and new credit cards for them came through the letterbox on a regular basis.  Seems they had zero money management.) sounds like LL is clueless. A contract can be labelled whatever - but what kind of contract (tenancy, licence to occupy etc) it really is is defined by the law, and the specific circumstances. Resident landlord hence not tenancy, hence 'excluded' from Housing Act protections eg deposit protection
    • My girlfriend made the decision to move out in part due to her mental health deteriorating as a result in part due to landlord actions.  The flat was poor in terms of cleanliness with LL never cleaning and leaving the place a state and neglecting to care for their dog, leaving GF to clean and look after dog.   Unfortunately all (legally) irrelevant. Did gf not view and notice the lack of cleanliness.....?  LL also had random different men on a fairly regular basis come over and stay with her, which was a minor trigger for GF, given past trauma/abuse from males in her personal life.  Again unfortunately irrelevant. It's the LL's home so she can invite who she wants.   Admittedly, other than verbal communication, I'm not sure if GF has written record of raising these grievances with landlord. Grievances like those above might lead the LL to agree an early surrender, but would not justify a right to ES, whether written or not.   GF has been signed off work by GP and occupational health since late October due to mental health problems of which the issues above were a factor in and noted in medical documentation. Again unfortunately irrelevant.
    • The agreement with regard to moving out early but still owing rent if no replacement was found was all verbal as far as I'm aware (will double check) and so is not worth paper it was never written on.  I guess the dispute would centre on the original signed contract and wording within which I will check. Yes you need to ready the contract
    • On a side note LL for the duration of the let was claiming sole occupier discount for council tax and no doubt is continuing to do so. Aha!

    Personally I would never advise a LL, or lodger, to sign a fixed term contract. Certainly not 6 months. Not even 1 month. Agree a rolling, weekly periodic contract. Then if relations turn sour the LL can evict or the lodger can serve (a week's) notice and no one has to suffer living with a nightmare.

    Girlfiend's best option might be a bit of subtle blackmail. "Let me leave next weekend, with no further rent owed, and return my deposit in fill, or I'll inform the council I'm living here (and at best you'll lose your single person discount and at worst go to prison for fraud... - no need to say that bit!)

    Could also mention telling HMRC as doubtless the LL is not declaring the income or paying tax. Actually the 'Rent a Room scheme' means tax is probably not due, but I doubt this clueless LL knows that!
  • FreeBear
    FreeBear Posts: 14,262
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    _Penny_Dreadful said: As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant.
    Normally, I would agree, but the LL has provided a contract stating AST - If it were to go to court, a judge may well say yes and throw some hefty penalties at the LL.
    I recall a case here a while back of a lodger going to court and convincing the judge he was a tenant despite evidence to the contrary. Cost the poster a couple of £K at the end of the day.
    Her courage will change the world.

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  • FreeBear said:
    _Penny_Dreadful said: As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant.
    Normally, I would agree, but the LL has provided a contract stating AST - If it were to go to court, a judge may well say yes and throw some hefty penalties at the LL.
    I recall a case here a while back of a lodger going to court and convincing the judge he was a tenant despite evidence to the contrary. Cost the poster a couple of £K at the end of the day.
    Unlikely but yes, possible.

    More helpfully it's another arrow in the lodger's threatening quiver: council tax, income tax, and non protection of AST deposit. Landlord might well decide to cut their losses.....
  • _Penny_Dreadful
    _Penny_Dreadful Posts: 978
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    edited 25 November 2023 at 2:35PM
    FreeBear said:
    _Penny_Dreadful said: As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant.
    Normally, I would agree, but the LL has provided a contract stating AST - If it were to go to court, a judge may well say yes and throw some hefty penalties at the LL.
    I recall a case here a while back of a lodger going to court and convincing the judge he was a tenant despite evidence to the contrary. Cost the poster a couple of £K at the end of the day.
    It doesn’t matter what the contract states. It cannot be an Assured Shorthold Tenancy. Yes, some resident landlords inadvertently manage to create a tenancy but not an Assured Shorthold Tenancy.  Schedule I of the Housing Act 1988 explicitly tells us that resident landlords cannot create an Assured or Assured Shorthold Tenancy. 
  • FreeBear said:
    _Penny_Dreadful said: As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant.
    Normally, I would agree, but the LL has provided a contract stating AST - If it were to go to court, a judge may well say yes and throw some hefty penalties at the LL.
    I recall a case here a while back of a lodger going to court and convincing the judge he was a tenant despite evidence to the contrary. Cost the poster a couple of £K at the end of the day.
    Unlikely but yes, possible.

    More helpfully it's another arrow in the lodger's threatening quiver: council tax, income tax, and non protection of AST deposit. Landlord might well decide to cut their losses.....
    How does the lodger know the resident landlord’s council tax status? Income tax, as you said yourself is likely to fall within RaR so nothing to declare. As it is impossible for there to have been an AST, because Schedule I of the Housing Act 1988 tells us so, the deposit doesn’t have to be protected. 
  • FreeBear said:
    _Penny_Dreadful said: As the landlord lives in the same property it cannot be an AST. As such there was no legal requirement for the landlord to protect the deposit. Your girlfriend was a lodger aka an excluded occupier, not a tenant.
    Normally, I would agree, but the LL has provided a contract stating AST - If it were to go to court, a judge may well say yes and throw some hefty penalties at the LL.
    I recall a case here a while back of a lodger going to court and convincing the judge he was a tenant despite evidence to the contrary. Cost the poster a couple of £K at the end of the day.
    Unlikely but yes, possible.

    More helpfully it's another arrow in the lodger's threatening quiver: council tax, income tax, and non protection of AST deposit. Landlord might well decide to cut their losses.....
    How does the lodger know the resident landlord’s council tax status? Income tax, as you said yourself is likely to fall within RaR so nothing to declare. As it is impossible for there to have been an AST, because Schedule I of the Housing Act 1988 tells us so, the deposit doesn’t have to be protected. 
    I'm taking the OP's word for the council tax - as the house is shared perhaps OP saw a CT statement? OP seemed sure.

    Re income tax and deposit, yes, but that doesn't stop the OP suggesting there's an issue and negotiating from there.
  • Olinda99
    Olinda99 Posts: 1,190
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    for me the situation is as follows - although of course it is quite possible that I'm wrong!

    your daughter signed an AST document - this is invalid because as explained above it is not possible to create an AST in this situation therefore there is no contract in place

    this being so your daughter was on a periodic tenancy and the amount of notice she had to give is equal to the rent period eg if she paid rent monthly then she had to give one month's notice

    the landlord is entitled to keep this rental whether she is actually living at the place or not
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