UK Landlord Forum / Life

Jun 2017 tenant moved in
Oct 2017 I registered the deposit
Jun 2018 tenant moved out
Feb 2019 tenant threatens court action unless I pay them 1.5 times deposit

This is the first time I've heard of this but after researching the subject tonight I'm concerned.  Can anyone give advice of the appropriate next step.

Assuming you took that deposit Jun 2017 (or before), and not you know Oct 2017 or something.

tl;dr: Bite the tenant hands off. Pay up, quickly, in full and final settlement to discharge any and all liability you may have against the tenant in relation to non-compliance of the deposit protection legislations.

As you failed to protect the deposit within the required time limit, you are liable to pay the tenant between 1x and 3x the amount of the deposit in penalty. If the tenant take you to court, you will lose, and you will be liable for cost on top as well. 1.5x with no additonal cost as a first offer is more than generous.

Quote from: Neil1980 on February 13, 2019, 11:02:13 PMCan anyone give advice of the appropriate next step.

If you are assured you're in the wrong... I suspect you suspect it, having given those details... then you know you won't win a Court case. I advise settling to anyone who comes in with this kind of dilemma... usually the Tenant or ex-Tenant is hoping they'll get the 3x from the Court and start out with this demand from their Landlord. It is seeming like your ex-Tenant is more reasonable... it may be the case they'd settle for 1x. If so, or even at 1.5x, I'd probably elect to settle (as advised) because no-one wants to go to Court on a sure thing like this. Yes, you might only get a penalty of 1x in Court, but in reality it won't be 1x you've paid-out, and the accompanying stress, time and effort etc..

If you think it's a genuine offer for settlement then possibly consider another genuine counter-offer in return... it may be that your hand is bitten-off (so you both end up in doing the biting, as it should be... biting shouldn't be one-way).

What I have never understood in this situation is whether reaching a settlement.with something in writing,will protect against the tenants coming back for more later.Something on Radio 4 about gambling,punters who  accepted lump sums in gagging clauses are now bringing prosecutions.Does this type of payment override their rights in law? 

If you wanted to be cast-iron then you'd probably get something drafted by a Solicitor, but having a piece of paper signed in "full and final settlement" (or other words) should give you enough cover. And having a Solicitor involved will only increase your costs. After all, most people are reasonable and honourable in life. Even if you think a Tenant chasing this money is not reasonable in the first place, when they've suffered no material loss, I suppose. I think my position is that it's fine. If the Landlord failed to do this pretty basic thing, they kinda deserve it. It seems the OP has a reasonable Tenant here (that is just conjecture of course). I bet there's a template letter / form somewhere...

Totally agree that Neil should settle and hope that is the end of the matter.

Does anyone have recent experience of going to court?

I'm struggling to find the criteria for the court to aware 1 or 3 times the deposit.

Quote from: Neil1980 on February 20, 2019, 12:03:05 AM
I'm struggling to find the criteria for the court to aware 1 or 3 times the deposit.

Because there isn't one.

It's up to the court's discretion, which is basically any factor the judge want to tak into account that's not so unreasonable that an appeal court will overturn a lower court judge's discretion. And if you want to know what that means, try googling "Wednesbury test".

Quote from: Neil1980 on February 20, 2019, 12:03:05 AMI'm struggling to find the criteria for the court to aware 1 or 3 times the deposit.

You can read up on previous Cases if you like.

It might be a general rule of thumb that a single-property-Landlord who has made a mistake in ignorance, has refunded the Deposit in full, possibly even apologetically, might be given 1x - the minimum - because they're basically a misguided good-egg... whereas your more professional (sic) Landlord with, say, 25 properties who seems to think the law doesn't apply to them and repeatedly steals the Deposits of their Tenants, even though they're well aware of the law, might be given 3x - the maximum.

But you simply cannot predict based on any published criteria. I believe a Court does take into account conduct prior to a case going before them... so if you've rejected what seems to be a fair and reasonable attempt at settlement... well, one wonders if that might not go against you.

Have you not even countered with 1x yet? Or 0.75x, or something? Or something in good faith? What you have here is a simple case of yourself being able to influence the situation to provide certainty - no bad thing - versus going to Court, with all the uncertainty, time, expense and effort that that involves.

Why are you sitting on your hands (if you are)? You should be acting... it's in your own interests, isn't it?

I say again... when we often hear of these situations, the ex-Tenant is often coming in, guns blazing, demanding 3x - because that's "what they read" or "what they were told down the pub"... in that they think 3x is a surefire thing... only when they're disabused of this notion do their demands become more realistic and we have definitely seen cases on this forum where settlement has happened successfully (sic).

In this case your ex-Tenant has started with 1.5x... forgive me, but it seems they're much more prepared and researched than you appear to be. You're on the back foot.

Quote from: Hippogriff on February 20, 2019, 09:26:23 AM
But you simply cannot predict based on any published criteria. I believe a Court does take into account conduct prior to a case going before them... so if you've rejected what seems to be a fair and reasonable attempt at settlement... well, one wonders if that might not go against you.

Conduct as in did you actually protect the deposit and only failed to give PI, yes.

Conduct as in the negotiation for a settlement, no. Those are almost certainly conducted on the basis of 'without prejudice save as to costs' which means not only can the judge not take it into account, the judge can't know about it at all before the judgment. If you accidentally reveal without prejudice correspondence to the judge before judgment, then adjourment, new judge, wasted cost order against you, ......

Quote from: Hippogriff on February 20, 2019, 09:26:23 AM
Have you not even countered with 1x yet? Or 0.75x, or something? Or something in good faith?

I don't think an offer less than the minimum penalty can really be called good faith.

Quote from: KTC on February 20, 2019, 10:33:31 AMI don't think an offer less than the minimum penalty can really be called good faith.

I disagree... it's not the amount, but the OP going back with something, some kind of counter-offer - in good faith, i.e. willing to settle and pay up... the ex-Tenant is demanding 1.5x (which isn't actually a penalty that could be awarded)... so I read into all this the fact the OP is not happy with just accepting 1.5x (even though that is a bird in the hand in my opinion) but has rather spent their time trying to figure out if it's worthwhile taking a chance at Court. This is wasted effort in my opinion. If they wish to reduce their potential exposure with assuredness it'd be a quick counter-offer of 1x... therefore simplifying their life and decreasing their end-game outgoing... but an offer of 0.75x is also an offer made in good faith (even if less than what would be guaranteed). It's still a bunch of free money to the ex-Tenant, and they might jump at it now, rather than fully expect 1x, but later... hence not just the amount, but also the timeframe.

I guess we don't know if the communication has been without prejudice... almost certainly, maybe...

Quote from: Hippogriff on February 20, 2019, 10:48:49 AM
the ex-Tenant is demanding 1.5x (which isn't actually a penalty that could be awarded)...

It is. The judge can award 1x + 1 pence if they want. So long as the amount is between 1x and 3x inclusive, that's all that matters.

Quote from: Hippogriff on February 20, 2019, 10:48:49 AM
I guess we don't know if the communication has been without prejudice... almost certainly, maybe...

I'm fairly sure that if the communication is clearly a genuine attempt at settlement, then that can be sufficient to fall within the rules of without prejudice communication even if it's not explicitly stated as without prejudice. Will obviously be case specific though.

Quote from: KTC on February 20, 2019, 11:05:53 AMIt is. The judge can award 1x + 1 pence if they want. So long as the amount is between 1x and 3x inclusive, that's all that matters.

Yes, I meant "would", not "could"... as in not typical at all.

I'm much more interested in what the OP is actually doing. It's been a week since the thread was started.

Settling via email.

My email and their email both say full and final settlement.  Do I need to get anything signed?  Will an email be acceptable, I want to resolve this and for it not to linger on

Yes,you really should get a signed document.I would go for belt and braces,with email as well.

Tenants are demanding one payment.  It is this normal or 3 monthly payments or something else?

There is no "normal",but  I would assume one payment is expected,get it over with.