UK Landlord Forum / Life

I had a tenant who left an AST after just 13 days. I did not lodge the deposit in a TDS. TDS provisions allow for 30 days for a deposit to be lodged. Under mutual agreement, the tenant left after 13 days after causing grave distress to the other 3 housemates. The tenant had bi polar condition. He did not disclose this prior to moving in.

I retained £500 for professional advice from a psychologist as how best to handle this tricky situation. After negotiation with him I returned the rest of the deposit to him as well as the balance of his first month's rent. He was satisfied with the total monies returned to him.

7 months later I am now facing a potential claim for an unreturned deposit, citing, as it was not put into a TDS, therefore, it was not protected. The father of the tenant is now pushing for me to pay a higher sum of £1300, or he will take me to court. This feels like extortion. Does he have a case ?


In the same house, I have tenants in the house who have been there for a long time. I have not lodged their deposits in a TDS. Can I now retrospectively do so without incurring problems ?

That' s a very expensive consultation fee for one bit of advice from a psychologist. Did you give the tenant an invoice for this?  If you have never protected the deposits for the others the fact that he was not there for 30 days is irrelevant, presumably you had no plans to do so in this instance. I doubt if this person has a case, but the others will have regardless of what you do now.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMI retained £500 for professional advice from a psychologist as how best to handle this tricky situation.

This sounds about as dodgy as you can get to me but, then, you're a Deposit protection dodging Landlord so what can we say... part of a Security Deposit is usually retained for breakages and damage, sometimes other losses... distress to third parties forcing a consultation for you is a new one on me. Regarding the claim - you say "potential", and only state the father of the ex-Tenant has so far approached you, you make no mention of anything more formal, like from a Solicitor. Worry about it when someone decides to take it on, otherwise it could be bluster so far - nothing further may come of it.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMI had a tenant who left an AST after just 13 days. I did not lodge the deposit in a TDS. TDS provisions allow for 30 days for a deposit to be lodged. Under mutual agreement, the tenant left after 13 days after causing grave distress to the other 3 housemates. The tenant had bi polar condition. He did not disclose this prior to moving in.

The reasons why he left aren't hugely relevant. I wouldn't expect a prospective tenant to divulge his personal medical history.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMI retained £500 for professional advice from a psychologist as how best to handle this tricky situation. After negotiation with him I returned the rest of the deposit to him as well as the balance of his first month's rent. He was satisfied with the total monies returned to him.

It would have been better to keep the rent and give him back the deposit. How many weeks' rent was the deposit equivalent to?

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PM7 months later I am now facing a potential claim for an unreturned deposit, citing, as it was not put into a TDS, therefore, it was not protected. The father of the tenant is now pushing for me to pay a higher sum of £1300, or he will take me to court. This feels like extortion. Does he have a case ?

The father of the tenant has no case. The tenant may have a case. The fact that the tenancy effectively collapsed and the treatment of the deposit was mutually agreed within 30 days is probably enough to scupper it. At any rate, it muddies the waters enough the the no-win-no-fee brigade are likely to steer clear.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMIn the same house, I have tenants in the house who have been there for a long time. I have not lodged their deposits in a TDS. Can I now retrospectively do so without incurring problems ?

You can't retrospectively protect a deposit but you can and should protect them now ... because that's the law. In doing so, assuming you issue the Prescribed Information (also the law), you'll alert your tenants to the fact that you've been in breach and they can claim up to 3 x the deposit per tenancy. That probably falls within your definition of "incurring problems" but, if you do nothing, there's a fair chance that one or more of your tenants will cotton on anyway and, in that case, the judge would be more likely to hand down a penalty at the higher end of the scale. You could try and wait it out until more than six years have passed since the last breach but, equally, your tenants could argue that failure to provide the PI (or even the How to Rent Guide) amounts to concealment and thus different time limits apply.

I'd suggest you work out your exposure, come clean with your tenants and make them a cash offer in settlement of any potential claim. A bird in the hand, with no legal rigmarole and solicitors taking their cut, is often better than two (or three) in the bush.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMIn the same house, I have tenants in the house who have been there for a long time.

1. How many tenants do you have in the house, including the one who was there just briefly?

2. How long is "a long time"? When did each of their tenancies commence?

3. Are each of these tenants on an AST that you renewed at the end of the fixed term (for example, every 12 months)? Or at the end of the fixed term, did you not renew and thereby allow the ASTs to automatically become Statutory Periodic Tenancies (SPTs)?

4. Do you have in date (i.e. valid) Landlord Gas Safety Records and EICRs?

There is a lesson here for Landlords who think they are entitled to make deductions on a whim, DON'T.

Tenants with a mental disability are not obliged to declare any part of their medical history, shame on you for expecting they should.

With any deduction it has to be in the terms and the term cannot go against common law, you would have to give the person you want to deduct from an opportunity to mitigate their loss (e.g. use their own cleaner).  I am at a loss to understand why you think you had any right to pass on this highly questionable charge.  You can get advice from any of the charities that help people with mental disabilities, so you had not basis to claim the fee.

I am curious how you now know the Tenant is bipolar, when it was disclosed and what you hoped to achieve by engaging this clinician to talk to you.

You say this "tricky situation" and have been made aware of that the person is vulnerable, did you even think whether they were capable of negotiating, Courts recognise that Landlords always have the upper hand as they can make a tenant homeless, I would expect the max sanctions if you went to Court and they had a valid claim.

I have represented vulnerable Tenants on numerous occasions, I often find the other tenants bully the vulnerable person to within an inch of their life.  Whilst you might not think this is your problem, you have to try to help if you can.  Ironically, just this week I was approached by such a Tenant with a different condition, he was evicted and told it was because the Landlord was not going to be letting anymore.  This turned out to be a total lie and just an excuse to evict him.  All the other Tenants remain.  Needless to say, we will not be settling for anything less that 3x each of the two tenancies.  The property is not licensed as an HMO so there will be a rent repayment order too.

Sadly, there is not much we can do about the Agent who was a party to the deceitful way this matter was handled.

Getting back to your claim it is going to turn on the date you returned the deposit, you mention 13 days, but was it within 30 days?  If it was over 30 days, pay what they are asking as legal fees can be abhorrent in these matters.

I have had one end upon arrival by the Tenant because Agent let to someone else, we patiently waited for the LL or Agent to return the deposit and got 3x as in that situation they had behaved badly. 

As for your other Tenants, they will have a claim for each of the Tenancies, my advice would be to protect the deposits now at the earliest possible moment after being made aware.  I would then seek a settlement with them while you have some sway (they live in your property). 

Do not blame the Tenants on this, you screwed up in your failure and something tells me you will be shit hot at doing things properly in future.

Quote from: Colin PIlkington on October 01, 2024, 04:26:28 PMI had a tenant who left an AST after just 13 days. I did not lodge the deposit in a TDS. TDS provisions allow for 30 days for a deposit to be lodged. Under mutual agreement, the tenant left after 13 days after causing grave distress to the other 3 housemates. The tenant had bi polar condition. He did not disclose this prior to moving in.

I retained £500 for professional advice from a psychologist as how best to handle this tricky situation. After negotiation with him I returned the rest of the deposit to him as well as the balance of his first month's rent. He was satisfied with the total monies returned to him.

7 months later I am now facing a potential claim for an unreturned deposit, citing, as it was not put into a TDS, therefore, it was not protected. The father of the tenant is now pushing for me to pay a higher sum of £1300, or he will take me to court. This feels like extortion. Does he have a case ?


In the same house, I have tenants in the house who have been there for a long time. I have not lodged their deposits in a TDS. Can I now retrospectively do so without incurring problems ?

Hi,

I'm casting around for an answer to this issue please. I've had long term tenants in a house, never a problem. Ive never registered them for a TDS. I now intend to do so. Could this incur a penalty ? If so, how much? Could I simply reset the tenancy agreement to today and then register the deposits ?

Thanks for any advice

Are you having a joke with us? Please,don't insult our intelligence. Have you actually read any of the advice from several forum members? You know quite well this could incur a penalty for up to 6 years from the initial lease.This would be between 1x deposit and 3x. Now you want to dig yourself deeper in that hole.

More worrying for you will be if you are running an unlicensed HMO and failing to provide all the legal requirements.The council and HMRC could get on the case.I hope you have not been that stupid?

I am guessing that you have chosen your tenants quite carefully,people unlikely to question things,maybe of limited capacity or grasp of English?
What a shame you spent all that money on a "psychologist",it could have gone towards your legal fees.

Hey Colin

If you are asking whether you are liable for sanctions under the deposit legislation, then asked and answered, but I will explain again.

YES you are liable if you held a deposit for more than 30 days without protecting it, note it starts from the date you received it which may be before the Tenancy started.  There are no clauses in the legislation that give you a way out on that (based on what you have told us), what they might do is allow the Judge to consider the matter at low end of the sanctions. 

HOWEVER, if you insist on going to Court not only will you pay the sanction (between 1x & 3x), plus claim company fees which are mostly exaggerated and obscene, but you will pay your own legal fees and the Court fee (£355).  Also I have to tell you that Judges do not like it when you fail to settle out of Court rather than wasting their time on a case with no hope. 

Claim firms are even seeking the 10% success fee and interest at 8%.  So my advice is to grab the offer to settle IF you held the deposit for more than 30 days.  Never get into protracted arguments with claim firms, their processes are designed to drag things out an generate costs.

You can ask for a detailed assessment of the other sides costs, but this happens after the current claim and has a separate fee, if you do not get at least a 20% reduction you pay the Court fee and the other side will likely ask for their costs in providing the assessment.

As explained previously, each of your Tenants has a claim of up to 3x the deposit per tenancy if you failed to protect their deposit, the longer it went on the high the chance of a 3x award.  Right now you have a relationship with the Tenants, which is why now is the time to face this head on, offer them the minimum they would get if they went to Court which is 1x the deposit per tenancy, if a tenancy passed the end of the fixed term and triggered S5 of the Housing Act 1988 then the SPT that section creates counts as a further tenancy. You might have had the Tenants for years but the clock on limitations can start when the Tenant becomes aware of the obligation not when it was taken. 

Don't knock other people for pointing out your actions would be deemed badly by a Court,

Maybe you have never had a problem but your Tenants might have a different opinion.  You can be sure that any witness statement will include anything that paints you in a bad light.

The registering of the deposit in itself will not trigger anything, a Tenant has to take you to Court but first they need to send you a letter before action, this is part of Practice Direction for pre-claim conduct, but honestly do not wait for that.

Instead write to each Tenant, explain that you have made an administrative mistake and you will shortly be protecting the deposit with the DPS (they are free on custodial protection). You are writing that letter for the Judge really as part of any mitigation you ask for.  You need to say you have just discovered the error but be careful to never lie, if you get caught in a lie then why would any Judge believe anything you say?  So if you were a novice Landlord when you took the deposit, you have no other properties, then you can explain you were a novice and this may help your mitigation.  If you protect it now then a Judge might consider that you did at least comply in the end. 

However, if they are faced with evidence that not only did you not protect the deposit but you made deductions that would be deemed prohibitive by the Tenant Fees Act, such as consulting a psychiatric clinician, then they may decide to throw the book at you.

It can go either way but it is always a minimum of 1x the deposit per Tenancy, the worst of the claim companies charge £1500 just to start the claim, they lock the Tenant in on a conditional fee agreement which binds them to the legal firm or else they pay that initial £1500 and more if the matter becomes protracted.  Of course I challenge these fees but you would not even be facing them if you settle before they bring a claim.

As a Landlord you will know that if you put a cheap boiler in then it will not last as long or may have more faults than a top end boiler.  All Landlords should expect to replace a boiler, it is a cost of being in the market, so consider this cock up of yours as the same and learn from the mistake.

Also do not forget the PI, you must serve it and you must get it right.

You can't "simply reset" the agreement, whatever that means. You can certainly ASK a Tenant to enter into a new agreement which they can decline.  It has no bearing on your liability, in fact, if you screw the new tenancy up by not providing a proper PI you can just add a new set of sanctions.

You need to understand the legislation, it is very binary and has been thought through to avoid Landlords seeking to get out of it. there have been several amendments and a considerable amount of case law.  The PI used to be 14 days, now it is 30, the biggest case law impact was Superstrike, this still holds except for where under the Deregulation Act (2015) Landlords were thrown a bone to allow them to correct the failure by protecting it late, this did not remove their culpability for existing mistakes but as long as any new tenancy FULLY COMPLIED with the original legislation then it draws a line.

I am telling you how to draw that line and I am telling you how to try to mitigate any future claim so that the Judge awards a low amount.  Different judges have different opinions, some charge 3x for the initial breach then 2x thereafter, some charge 1x for a first offence that is corrected in a relatively prompt period, but hike it up to max thereafter.  They will often look at the opportunities and reminders that could or should have made you get it done.

So unless you have a time machine you can't change this, which is why claim companies love this sector.

Quote from: Colin PIlkington on October 10, 2024, 08:12:34 AMHi,

I'm casting around for an answer to this issue please. I've had long term tenants in a house, never a problem. Ive never registered them for a TDS. I now intend to do so. Could this incur a penalty ? If so, how much? Could I simply reset the tenancy agreement to today and then register the deposits ?

Thanks for any advice