Rental Deposit: Holding Over

barnsleyttt

I rented a property on an AST, and paid a deposit as part of that.  The fixed period of the AST ended after a year and now I'm holding over.  Shortly after the fixed period AST ended, I received a letter from the deposit company to say that it had been automatically unprotected. 

I would guess that that the landlord should have done something to extend the protection and that their not doing so, for over a month, is cause to require the return of the deposit.  Is that so, or am I overreaching?

FlorayG

I've never heard of 'automatically unprotected' what do they mean by that? If the deposit company 'unprotected' it then surely they should have returned it? As protecting your money is the only job they do. Are you sure it was from the DP company and not from the LL or their agent?
I'm a LL I've never had that happen at the end of an AST

anselld

Unprotection happens in the insured schemes if the Landlord does not pay the additional premium to continue protection after the fixed term.  With insured schemes the Landlord holds the actual deposit so it cannot be returned by the scheme.

However the Landlord is responsible to protect the deposit throughout the tenancy including after the fixed term if the tenancy continues as periodic.  Hence the OP is able to sue for a non-protection penalty of 1-3x the deposit and the Landlord is currently unable to issue a valid s21.

FlorayG

anselld said:

Unprotection happens in the insured schemes if the Landlord does not pay the additional premium to continue protection after the fixed term.  With insured schemes the Landlord holds the actual deposit so it cannot be returned by the scheme.

However the Landlord is responsible to protect the deposit throughout the tenancy including after the fixed term if the tenancy continues as periodic.  Hence the OP is able to sue for a non-protection penalty of 1-3x the deposit and the Landlord is currently unable to issue a valid s21.

I didn't know about this option; what is the value to the LL of doing things this way? Is the interest they get on the deposit in their own bank account more than the cost of the insurance (not in this particular case, obviously!) and if not I can't see the point of it, particularly as there is the danger to the LL of this happening if they are lax

silvercar

FlorayG said:

anselld said:

Unprotection happens in the insured schemes if the Landlord does not pay the additional premium to continue protection after the fixed term.  With insured schemes the Landlord holds the actual deposit so it cannot be returned by the scheme.

However the Landlord is responsible to protect the deposit throughout the tenancy including after the fixed term if the tenancy continues as periodic.  Hence the OP is able to sue for a non-protection penalty of 1-3x the deposit and the Landlord is currently unable to issue a valid s21.

I didn't know about this option; what is the value to the LL of doing things this way? Is the interest they get on the deposit in their own bank account more than the cost of the insurance (not in this particular case, obviously!) and if not I can't see the point of it, particularly as there is the danger to the LL of this happening if they are lax

Either they need the money to solve a temporary cash flow problem or they get more interest on it or they feel the insurance protection scheme is more likely to side with the landlord in the event of a dispute if they hold the money themselves. There is also the option of  a tenant or landlord deciding they will only accept a court ruling in the event of a deposit dispute, so the tenant would have to go through the hassle of a court case to get their deposit back that the landlord is holding.

theartfullodger

You have a stupid ignorant landlord.  Lucky you, you've got power over the clown.

Don't tell him about his mistakes, you're better with this not getting fixed.

barnsleyttt

theartfullodger said:

You have a stupid ignorant landlord.  Lucky you, you've got power over the clown.

Don't tell him about his mistakes, you're better with this not getting fixed.

Can you elaborate on that?  What would happen if I raised it at the end of the tenancy as opposed to what would happen now?

RAS

Keep copies of that letter, original, scanned and email yourself. Your LL has shot themselves in the foot and .... Twice.

They are now unable to issue an S21 notice to terminate the tenancy. Even if they return the entire deposit now. Could issue S8 so you still need to pay rent.

They are now liable for a penalty if you choose to sue them, up to three times the deposit. If you keep quiet and they continue to fail to insure, this might apply to each new tenancy renewal.

There was a case here last year when the LL has not renewed an insurance deposit, three times, and the court granted a separate penalty for each of the tenancies. Even though the LL felt that the fact the deposit was originally protected was a mitigating circumstance and she should only pay one penalty. Not three times three but I think it was 3x2xdeposit.

So you keep quiet, wait 'til they issue an S21, stay, explain the error of their ways if they start court action. Leave when it suits you. If they don't return the deposit in full, offer to sue for the penalty.

Not seen a case here when the triple penalty was granted and a single renewal failure might result in a one times penalty. Some people settle for advance return of the deposit and a good reference, knowing they don't have to sweat when they leave.

silvercar

“ They are now unable to issue an S21 notice to terminate the tenancy. Even if they return the entire deposit now”

Given they initially protected the deposit, I’m not sure this is right. Returning an initially protected deposit may well allow the landlord to issue a S21.

[Deleted User]

barnsleyttt said:

I rented a property on an AST, and paid a deposit as part of that.  The fixed period of the AST ended after a year and now I'm holding over.  Shortly after the fixed period AST ended, I received a letter from the deposit company to say that it had been automatically unprotected. 

I would guess that that the landlord should have done something to extend the protection and that their not doing so, for over a month, is cause to require the return of the deposit.  Is that so, or am I overreaching?

What are you trying to achieve? If there is damage at the end that's what the deposit is for, if not then it should be returned to you. It looks like an administrative error by the landlord, potentially a costly one if you claim up to 3x deposit.

However, is there reason to create difficulty in the relationship over an error? People on here get far too excited. After all the landlord did at least originally protect the deposit. Think about how you can continue to have a positive relationship with landlord is my suggestion.

RHemmings

silvercar said:

“ They are now unable to issue an S21 notice to terminate the tenancy. Even if they return the entire deposit now”

Given they initially protected the deposit, I’m not sure this is right. Returning an initially protected deposit may well allow the landlord to issue a S21.

If the tenant refuses to receive the returned deposit, then the landlord is still in trouble.