UK Landlord Forum / Life

Hi all,
I had a tenant (nice Portuguese family) that moved out in September. The move was all amicable, they decided to move as I had told them the house was going to be sold in the near future, but stressed that they would get a 3 month notice period if I was to get an offer (all in writing) There were no issues what-so-ever during the tenancy and they moved out early after a months notice to me which I had no problem with at all. I paid the deposit back in full within a month of them moving out.

So you get the idea that everything was pretty normal, a really good tenancy relationship. The house has been sold as of a month ago.

Now, I had an agent put the tenants in and sort out the paperwork, pictures deposit etc. Unfortunately, the deposit wasn't registered and I only realised that this had gone into my house account which I don't bother with (I have 2 other rentals and monies function from one account, I check every 2 months or so)

When I realised this deposit hadn't been registered I already had the house on the market and they had served their notice, so I didn't bother. 2 months later (Friday 7th Dec), I get the nastiest of letters from what appears to be a no win no fee company wanting a settlement of £4800 as the dep wasn't registered. I'm devastated and haven't responded as yet.
What should I do?

Many thanks in advance,

Pen

Can you clarify, please?

The amount of the deposit, I'm assuming it was £1,200... or was it £1,600?
Whether you returned it in full at the end of the tenancy you are talking about?

Quote from: PenMJ on December 08, 2015, 01:40:44 PM
I'm devastated and haven't responded as yet.

Don't be devastated, take it on the chin.  Just see it as a very expensive lesson that you'll never do again.

The claim amount in the letter sounds like they are trying to claim the maximum amount possible (Deposit+3x deposit) the only person who can award 3x is a judge.  You may get away with 1x the deposit although as you are an experienced landlord this may go against you.

You can't blame people for wanting some free money.

If the agent was explicitly supposed to protect the deposit on your behalf you can recoup the money by putting a claim in against them

@ Hippogriff

The deposit was £800 and rent was £650 and the deposit was returned at the end of the tenancy. They got excellent references as well. Just think its a bit of a poor for them to try and get a free 'windfall' He works on Harley street, so I'm sure he not strapped for cash and I would have thought better things to do with his time.

I know I should have double checked, but i didn't so my fault. The deposits have always been registered so this slipped through the net.

Just goes to show that the kindest of people are grotbags.

Pen

So, first thing in response is - why would the amount being demanded be £4,800?

If the deposit was £800 and the original deposit has been returned then the maximum penalty that a Court could award against you is 3x the deposit... 3 x £800 is £2,400 unless my maths is all whack.

So what sane person would settle for £4,800 when the maximum exposure to them is £2,400? Obviously there's the additional hassle of a Court visit and costs and suchlike... but, still, as a settlement offer it's a decidedly unreasonable demand.

However, what's not unreasonable is the demand itself (just the amount). You have failed (this time) in your obligations as a Landlord - you know it, I know it - whether it was you directly or an Agent acting on your behalf, that doesn't really matter. You are exposed by this and I'd suggest you try and come up with a way of achieving a settlement on your own terms.

You might elect to do nothing and hope that it all just goes away... it might, it's not an insignificant amount for someone to bring a case to Court... however, they are assured of a win, that much is certain.

Personally, I would offer a settlement of £800. Others may disagree.

1x is the minimum exposure that a Court could penalise you for - don't let anyone think that 3x is a surefire thing, it ain't - and as it would be considered your first offence and there are extenuating circumstances (although ignorance - which you don't claim anyway - is not an excuse)... so you'd hope for a 1x penalty.

However, that probably doesn't sound that attractive to the ex-Tenants when they realise that there'll be some meat off the bone from the company acting on their behalf... so it might not even work.

Whatever happens, you will not make the same mistake again.

What do you think you will do?

@ Hippogriff

Hi there,

Thought I'd posted a reply yesterday but its not showing. I have contacted my solicitor and they have said that they can advise me and write me a letter to send to them for £££! So i think I might go and see them tomorrow first with a friend of mine and see if they will re-think this. I'm ok with making them an offer as i know they will want to be given something so its just a case of how much and how I go about all of this. This I have no idea about. So do you think £800 is what i should do? :-(

I've had another look at the letter that their solicitors sent me and half the information is wrong, like the date of the tenancy! They apparently paid the deposit to the agent on the 25th October and contract started in the 7th November. I've just checked my bank statements and I didn't receive any residue money (after her fees etc) from the agent until the 7th which is when they moved in. So no wonder its all got mixed up.

From reading the letter again they are saying that it went from and AST to a rolling contract and the deposit was paid 2 times, hence the double whammy of what they want. Thats a new one to me..

I want it resolved asap as I'm preggers and due in the new year so not great timing but there you go!

Any other advice is greatly appreciated.

Many thanks

Pen

Ah, makes sense now regarding the 2x.

Look, at a certain point you're going to have to decide whether a reasonable offer (money for nothing) is going to tempt them, or you're going to refuse to deal and let it go all the way. I would seriously doubt that they'd get 6x a deposit award from a Court. It's a scare tactic, right? Big figure makes you counter-offer with a figure too good to be true.

Personally, I'd offer the 1x deposit and hope it stuck, but it really might not. The £ signs are undoubtedly in their eyes. I'd get it all in writing and then at least a Court can see that you were reasonable and tried to resolve it before reaching Court and it was them that refused to settle.

The alternative is to ignore. It's got to be some effort for the other side to bring a case... what you don't want is costs rising that you end up being liable for.

I don't know whether the information in the letter from the no-win-no-fee outfit will have any bearing on the outcome.

When did the SPT commence? The Deregulation Act 2015 does mean that deposits don't need to be unprotected, reprotected etc. when a fixed term moves to a SPT... could this help you? For example, I had a tenancy that commenced in April 2015... it had a 6 month fixed term... when 6 months was up, I just informed the Tenants they were on a SPT now and that there was no need for us to do anything regarding the deposit, it just stays where it is, protected, no new PI needs to be served or anything like that.