Serving a Section 21 Notice and the Tenancy Deposit Scheme

E201

Dear all, 

I was about to serve a Section 21 Notice to my tenants however I have just realized that I did not register the tenants' deposit with the tenancy deposit scheme. I understand this is an issue if serving a Section 21. I genuinely forgot and would be happy to make the deposit into the scheme however this should have been done much early (within 30 days of the deposit being received).

I'm not sure what to do and would appreciate any advice. Thank you for any guidance on this.

RHemmings

https://www.talbotslaw.co.uk/site/section-21-notice-uprotected-deposit/

The relevant parts of the above are:

What if a landlord has not protected the deposit within the requisite time frame or not provided the prescribed information to the tenant?

If the deposit was not protected within 30 days of it being received by the landlord, then the landlord will be unable to serve a Section 21 Notice on the tenant, even if the landlord takes steps to protect the deposit after the expiry of the deadline, because the landlord will have failed to comply with their obligations within the requisite period.

This will also be the case if the landlord does not provide the prescribed information to the tenant within 30 days of receiving the deposit.

To serve a Section 21 Notice in the above circumstances, a landlord will be required to return the deposit to the tenant in full before they can serve a Section 21 Notice. However, the landlord will be unable to rely on the accelerated possession procedure and will instead have to issue a standard possession claim once the notice period within the Section 21 Notice comes to an end. A landlord will have to prove to the Court that the tenant has received the deposit, and the landlord may encounter issues if the tenant declines to accept the deposit back.

If the tenant refuses to accept the deposit, then a landlord will be unable to serve a Section 21 Notice and a landlord will only be able to progress a claim for possession based on a Section 8 Notice, which can only be served if there are relevant grounds to do so.

theartfullodger

Return deposit.  Recognise tenant can claim for up to 3xdeposit for your law-breaking error.  Parliament passed deposit law twice - second time to give landlords more than twice the time to do the very onerous admin.

Be calm and polite with tenant.

Check if s21 will be valid -shelter have great checklist as do "nearly legal". Many many are not 

Done any training or education in being landlord and/or landlord/tenant law? 

E201

Thank you for this. So, if I return the deposit now or say on Monday then receive it back from the tenant I can then put it in the tenancy deposit scheme and all is right and proper? 

E201

Thanks for your reply and advice. Unfortunately I haven’t done any training in this area. I wasn’t expecting to have to serve a Notice I thought it would be much simpler. 

E201

Dear artfullodger, Sorry just to double check. I return the deposit then do I request it back and then add to the tenancy deposit scheme? 

FlorayG

E201 said:

Thank you for this. So, if I return the deposit now or say on Monday then receive it back from the tenant I can then put it in the tenancy deposit scheme and all is right and proper? 

er...no. You just have to give it back and hope the tenant doesn't claim anything more from you.

Alderbank

Are you on good terms with your tenant?

You can offer the deposit back but if they want to stay in the property and have been given good advice they will refuse to accept it.
That prevents you from issuing a valid s21 indefinitely. So long as they pay rent they can remain in the property as long as they wish.

Whitlane

You just need to hope that your tenant is not aware of their rights and doesn’t claim 3 times the deposit back from you.  You will loose if it goes to court.  

You also can’t issue a Section 21 due to your failure to protect the tenants deposit.

E201

I’m on good terms with the tenant. I have just offered to give back the full deposit but they have declined saying:

‘May it’s better first we move out and clear the flat totally. After that you can come and check the flat if you are happy with everything then i will give you my account details.’

It looks like I won’t be able to evict them using section 21 and therefore unable to sell the property. The tenancy agreement runs until April 2026. Will I still be unable to evict them at that point? 

RHemmings

Alderbank said:

Are you on good terms with your tenant?

You can offer the deposit back but if they want to stay in the property and have been given good advice they will refuse to accept it.
That prevents you from issuing a valid s21 indefinitely. So long as they pay rent they can remain in the property as long as they wish.

There are more grounds for issuing a S8, other than non-payment of rent. None look easy to establish, however. I think they are:

Rent arrears, late rent paymnents, breach of tenancy agreement, antisocial behaviour, change in use of  the property, the owner wants to move back in, and repossession by a lender.

At least that's the current situation, as I understand it. Laws are changing, so will this change too? 

E201 said:

I’m on good terms with the tenant. I have just offered to give back the full deposit but they have declined saying:

‘May it’s better first we move out and clear the flat totally. After that you can come and check the flat if you are happy with everything then i will give you my account details.’

It looks like I won’t be able to evict them using section 21 and therefore unable to sell the property. The tenancy agreement runs until April 2026. Will I still be unable to evict them at that point? 

Are they agreeing to move out? If so, let them. Then, no S21 problems. Are they aware that you didn't protect the deposit? If they are, and I was you, I would return and say that since you failed to protect it, that you really want to give it back.