UK Landlord Forum / Life

Good evening,
I registered with the DPS in 2010 but in my naivety/stupidity (first time landlord with no other properties) didn't put in the money.  I actually thought registering was enough. Doh! They have been continually late payers throughout the 6 years. I served them a Section 21 notice.  After realising my now costly mistake, I then put the money into the DPS and served them a new Section 21.  After seeking advice I have returned their deposit to them (£540) but  a week later I received a 'Letter before action'.  They are open to a 'reasonable offer'  out of court settlement - good for them! 
I know I am going to have to pay them something but can anyone tell me what's 'reasonable', I suppose the starting figure is £540??  How do I write the letter with the offer too please?
Any advice would be gratefully and graciously received.  Thanks for reading....

Evil Landlords must pay... apparently.

The deposit was £540. Your theoretical maximum penalty is 3x £540. But that is incredibly unlikely. You need to ensure your reply makes it clear just in case someone has been whispering in their ear that 3x is a sure thing.

Your minimum penalty is £540, if it goes all the way. There may be costs, so you'd want to avoid that, assuming you're sensible. Is there much point in offering the £540? Possibly. A bird in the hand this close to Christmas could be tempting. Money for no effort. A mid-point might be the sweet spot. The point is you'd expect the 1x penalty at Court because you're not a repeat offender etc..

I'd try £540. £600. £650. £700. £750. £900 LAFO... then take my chances.

Is anyone writing the letter on their behalf? Will the money go all to them or is there a fee they may owe a legal firm?