UK Landlord Forum / Life

Really not too sure what's going on here and just hoping someone can shed some light on the issue

I had a tenant who caused damage, breached his tenancy agreement  so I agreed to him ending his contract early.  There had been anti-social behaviour as well so other tenants in the flats made complaints several times.

Because of the damage and the financial loss, I refused to give him his deposit back so it went to arbitration or whatever it's called.  The agent did all that but after being told if the tenant didn't raise a dispute within 3 months, the deposit would automatically be paid to me.  The agent has now contacted me and sent a Deed of Indemnity for me to sign so the deposit gets paid to me.

I have never seen this Deed of Indemnity before.  I knew nothing about it when I engaged the agent and some of the wording on it is positively biased.  For instance, it says the landlord has agreed to various covenants, one of which is that the landlord understands that the tenant may bring a court claim against the landlord and/or agent for the repayment of the deposit up to 6 years from the date of this deed.  I've agreed to nothing of the kind, how could I when I didn't know of the existence of this deed.

Are these people having a laugh?  I have never been given any of this information, or been made aware of this in any way shape or form from the agent at any time so does that mean if I refuse to sign it I don't get the deposit so I end up out of pocket because some agent couldn't be bothered to give me all the details when I first instructed them?

It's a bit much.  If I'd have seen this so called deed and the contents of it or even been made aware of its existence, there's absolutely no way I'd have agreed to any of it or instructed this agent.  Are agents allowed to get away with that and keep the tenant deposit for themselves or pay it back to the errant tenant? 

I am not sure what you are angry about? It sounds as if the agents have been unable to contact the tenant.If that is the case,this is a standard document that covers them if the tenant suddenly pops up years later and demands their deposit back.

Quote from: 1614lindi on October 30, 2019, 12:13:15 AMIt's a bit much.  If I'd have seen this so called deed and the contents of it or even been made aware of its existence, there's absolutely no way I'd have agreed to any of it or instructed this agent.

But you haven't agreed to it. They've sent it to you to sign. That signing would be you agreeing to it. You come across as a bit confused about it, have you had a conversation with your Agent about this, in detail, and your concerns? Usually a party wants protecting for reasonable reasons. Anyone would wish to protect themselves, right? It's whether it's reasonable.

H, thanks for that.  The agent has never mentioned anything about any indemnity.  The tenant had a forwarding address, telephone number, the lot and the agent was 'supposed' to have been in contact with him. The tenant knew he would be losing some if not all his deposit due to the damage he'd caused and his continued anti-social behaviour which the agent had contacted him about.  As far the damage was concerned, it was very obvious from the photos taken at the final inspection, there was enough damage to warrant a complete re-decorate.

However, even with this clear evidence, the message I got from the agent after the final inspection was 'would you please authorise the release of the deposit back to the tenant'.  When I pointed out the problems, the agent contacted the tenant several times, told him what was happening, told him he had 3 calendar months to lodge a dispute but although the tenant was in contact and was very well aware of the situation, he made no effort to lodge a dispute.  This was probably because he knew he would be on the losing side, so then he stopped contact completely.

At no time has this agent ever discussed anything to do with indemnity nor have I received anything whatsoever in writing.  What I was told was as follows:

The tenant has 3 calendar months to lodge a dispute against you claiming the full deposit for the damage and anti social behaviour breach of the tenancy agreement.  If, after the 3 months has lapsed, the tenant still has not lodged a dispute, then the deposit will automatically be paid to your.

That's why I was very confused about suddenly receiving this Deed of Indemnity to sign when I knew nothing about it and was curious to know whether or not I have to sign this to get  my money or whether I forfeit the deposit money if I don't sign.

The agent has been massively at fault throughout and I don't see why I should be expected to cover their costs if this tenant decides to claim against the agent anytime in the next 6 years.  Something doesn't sound quite right somehow, just needed to see what other landlords would do.

The three month period relates to the deposit protection scheme's dispute resolution service. If your erstwhile tenant raised a dispute within that period, the scheme would arbitrate, free of charge and without having to get the courts involved.

Now the three months is up, the deposit protection scheme pays the money back to you/your agent and drops out of the picture.

However, it is theoretically possible that your erstwhile tenant could bring a court claim against you/your agent for the return of their deposit. It's very, very, very unlikely - your erstwhile tenant would incur costs in bringing the action and would have to prove his case in a court of law on the balance of probabilities, against the weight of evidence that you could bring, not the least of which would be that he had ample opportunity to raise a dispute with the deposit scheme but didn't. It's this tiny risk that your agents are seeking to indemnify themselves against, probably more out of force of habit than anything.

Just make sure it doesn't indemnify them for negligence if they failed in a contractual duty to protect the deposit/serve the PI within the prescribed time limits.

Quote from: 1614lindi on October 30, 2019, 12:13:15 AMI refused to give him his deposit back so it went to arbitration or whatever it's called.

Doesn't sound like it went to arbitration. If it went to arbitration, then the agent wouldn't have any issue handing the deposit over.

Read to me like the deposit was in an insurance scheme. The agent actually have the money in its account. Up to 3 months after the end of the tenancy for tenant to raise a dispute with the deposit scheme. After that, the scheme wouldn't arbitrate for a return of the depsoit. However, the tenant would still have 6 years from the end of the deposit to go to court against the landlord/agent for its return, hence the agreement the agent want you to sign. Technically it's not your money unless and until the tenant agrees to the deductions. A if the tenant shows up after 3 months and go to court saying they're entitled to the deposit return, not our problem.

Ah right, thanks to everybody for the replies. 

It looks like the agent hasn't given me the full details of how they have secured the deposit or what type of scheme it was put in. 

Why can't these damned agents be upfront and honest, or is that asking too much.  This agent is going to be binned when the current tenancy finishes.  They have made so many mistakes, given so much false information and caused so many problems, I'll find another agent but knowing now how things are done, thanks to this forum, at least I will have more idea what should and shouldn't be done.

I never wanted to be a landlord anyway and with agents like this is it any wonder.  Can't wait for the day the place gets sold, can't come soon enough.

Thanks everybody

Quote from: 1614lindi on October 30, 2019, 10:44:04 PMWhy can't these damned agents be upfront and honest, or is that asking too much.

In a way, yes... you are small-fry... there's no time or facility to mollycoddle you and do things bespoke. They just want your money for old rope... they want you to treat them like a black box - you can't see what goes on inside, you just trust it's in your interests... that's really what an Agent is about. You emote about this like it's particular to you, it isn't. I don't recommend people with a single property become Landlords... it's never going to be your focus, try to avoid dipping your toe in to things and making a mess of it. You do right in getting out... there's no real benefit to you in this, unless you like it and intend to grow - but, then, you'd probably be doing more things yourself anyway.

Hopefully you don't receive a claim for Deposit non-protection (or incorrect protection, late etc.) in due course. Could be expensive.