UK Landlord Forum / Life

Hi,
My partner did not register the deposit from the tenant. However the tenant has left and paid back the majority of the deposit and we kept a little of it to cover 5 days of extra rent that he stayed in the property (worked out by doing yearly rent divided by 364) and for breaking a light fitting and to repaint two rooms that he changed to bright colours. Paint alone was 200 for one of the rooms and we just added a token amount for labour (that we were invoiced by builders for).

However he contacted a lawyer and because my partner didn't register the amount at the beginning (which is an error) we have these solicitors on our back. We have since returned the rest of the deposit. How likely is it that the solicitors would advise our previous tenant to drop it? Also on the second tenancy agreement my partner had put 0 as the deposit and just carried the first one over. We did also return the majority of the first deposit within ten days and when requested.

Just wondering where we stand legally and how likely the solicitors are going to push for more? What court judges are likely to say? It's a no win no fee company called phoenixlegal but I'm assuming they will want their cut as well. We have since hired a property expert to do our new letting and he seems to be so much on it and telling us what we need to do to be compliant.

Many thanks for feedback. It took us around 10,000 to fix up the place afterwards so will be gutted if we have to pay another 7000 in compensation.

I am assuming that the £10k is what you would have spent anyway,not due to damage from the tenant? If this goes to court it sounds as if you might get off lightly with 1x deposit. How have they arrived at the 7k figure? Did your partner give all the other necessary documents and gas/electric certs?

Thanks for your input. Well we needed to repaint the walls, remove items he left on the premises, he allowed areas of the house to go mouldy due to poor ventilation etc., we had to get areas replastered (my partner lived there before and had no issues with this for 7 years).  We also had to fix light fittings his decorators broke. In addition to this, we allowed him to leave his tenancy early despite him being tied in until the end of this month. We never raised the rent in 7 years and feel a little like we have been stabbed in the back over the little deposit we kept.

We had to change all the carpets but I guess after 7 years that would be expected.

So in your opinion a one month deposit fine is likely? It's because he had two tenancy agreements with us which means it would x3 for both times. Which is why I queried if it matters that we had 0 deposit on the second one to be returned or by virtue of it being on the first one even though we had 0 down it was likely to be expected on the second one? This is clearly a mistake that will not be made again. 🥺

Firstly - you can't add a token amount for your own labour - either hire a professional and use that to deduct, or don't.

Secondly - you've not been stabbed in the back... the ex-Tenant is exercising their legal right because you (the royal you) didn't do what you were obliged to do - protect the Deposit. Putting £0 as the Deposit for the second tenancy doesn't mean you didn't have a Deposit - as you say, you just carried the other one over... but if the Deposit was protected with a scheme then that means it was at least withdrawn and put back in - therefore it was absolutely another Deposit. If you held it yourself (as it wasn't with a Scheme, then I'm guessing so) then that clearly wasn't the same Deposit because a Deposit it tied to a tenancy - you putting £0 down was you just trying to clever, right? No-one actually thought there wasn't a Deposit, did they? It's not clear - to me, at least - what was carried over exactly - as you also say you returned the majority of the Deposit from the first tenancy - so what was carried over - something or nothing?

The efforts and cost you've laid-out for bringing it back up to spec. aren't at all related to the Deposit question. A Court will assess that in isolation - the question will - "was the Deposit protected, on time and correctly?" - and, in your case, the answer will be - "no".

Although 1x is theoretically possible... there's a nagging feeling I have that you may not have been compliant in other obligations. Why? Because protecting a Deposit is so simple and easy when compared to things that are more challenging, like having a GSC, EICR, working smoke alarms, etc..

You ask how likely it is the Solicitors are going to advise their client / your ex-Tenant to drop it. I would advise this is 0% likely.

In situations like this... I always advise to try and settle because then, at least, you are not at the whim of a Court on the day. Is a penalty due? From what you've said - yes. If a Court agrees the Deposit wasn't protected then the Judge does not have leeway to "let you off" 'cos you were ignorant or are genuinely contrite... it's 1x (per tenancy) or more. Don't put your head in the sand. Ask anything here you want to ask... people will answer.

Thank you for your input Hippogriff, I appreciate your comments. Regarding the deposit scheme etc., and my partner's wrongs in it. I have only recently been aware of this as me, as this was set up by him and his ex many years ago. So it wasn't done deliberately, I appreciate the context may not have been as clear as it needed to be. This was the first time he had rented out so did make a mistake in that regards. However, he always responded and made any improvements in a timely manner and is a genuinely good guy in my opinion, having like I said not raised the rent in the last 7 years despite many opportunities to do so.

He obviously is feeling a little upset and stressed by it as this is his first dealing with any issues in the 9 years he rented to them. I did say it feels like a stab in the back to emphasise the feeling not that he had been. The first two years was through an agent and it was only the tenancy deposit scheme that he didn't realise he needed to do. The 0 was not to be sly, it's because he and tenant filled it out together and they decided to just carry the deposit onto the next one but they didn't realise that they had to return it and then give it back, so between the two of them they agreed just to have it as 0. When I said the majority of it was given back (but now the full amount) I meant at the end of the tenancy 75% was returned and only the extra rent days and the paint and a token amount from the builders invoice was put in.

The labour token gesture was actually carried out by a builder and not my partner himself as he had the other rooms redone. (We have the invoice as proof). He could have asked for a specific quote but it would have been a lot higher and he didn't want to do that to the tenant. His total renovation amount was £9,200 and the amount for the paint was for just one of the rooms he painted and not for both rooms but he didn't want to part with his tenant on a negative note and felt he was being fair.

I would like to add that the tenancy agreement was for until the end of August, but my partner didn't look at making them stay the whole duration (there was no break clause), so I do feel that my partner is a nice guy but just didn't realise about the tenancy deposit scheme. He has all the other certificates etc.,

Through research, it's been discovered that the tenant has also been registering and continues to have two businesses registered at the address (which is a breach of the tenancy contract too). So we also need to solve that side as well.

That said, we appreciate you advising us to settle and making us aware that solicitors would advise the tenant to do so as well. I would like to say he this is an honest mistake on his part, and had he known he would have registered it.

Let me try to be clear for you on a few points you might hope work in your favour, but - sadly - don't.

The Deposit not being protected deliberately - isn't relevant to any Case brought.
Your partner not raising the rent for 7 years - isn't relevant to any Case brought.
Being a newbie Landlord - isn't relevant to any Case brought.
Any improvements made to the let property - isn't relevant to any Case brought.
The Tenant getting out of the agreement early - isn't relevant to any Case brought.
The Tenant having registered business addresses there - isn't relevant to any Case brought.

So, hopefully, that kinda rams home the need to at least consider settling... figure out your minimum and maximum exposure (get advice if you need to - but it's easy enough) and then aim to settle based on the lower end - even less than 1x can be an opening gambit. Don't expect it to fly, though - as you rightly point out - they'll now have Solicitors in their ear promising riches. Now, I didn't want to imply the Solicitor will be of the same mind, certainly not at the lower end... they'll want to squeeze - and will know they are onto a good thing - an open-and-shut case.

If you do try to settle... ensure you make them painfully aware you are well aware of the theoretical maximum exposure - but you have considered all the aspects (first-time Landlord, Agent involved at the beginning, Deposit now returned in full etc. etc.) and feel that a Court would err on the minimum side of a penalty... then offer a little bit less than that in an effort to avoid "all this unpleasantness" then fully expect and prepare to be roughly spun around, bent over... and, well, we know the rest...

Good luck.

Hi Hippogriff and also Heavykarma,

Thank you both for your input. I think I was looking for reassurance that given how my partner has behaved and the context, that it wouldn't be (hopefully) the maximum penalty. As discussed, he has acknowledged his error and we did return the entire deposit. The letter we received from the solicitor told us the full theoretical amount and also court charges, solicitor charges,  interest and so forth, so we have been rather stressed and upset by it all (given that this is the first time something like this has happened) and obviously felt it was quite an extreme penalty for what was an honest mistake.

We too would rather draw a line underneath it all but will have to see how the solicitor and the previous tenant respond.

Many thanks.