UK Landlord Forum / Life

Dear David,

My tenants moved into my property on 1st July 2020.
They paid their deposit on 29th June 2020.

I am an accidental landlord. I did not want to rent the property but had to as I could not afford the mortgage (could not find a job due to COVID-19).

I am new to letting and do not know much about procedures.
The deposit from the tenants was put into the bank account where their rent is transferrred to. I thought this is what all landlords did.
The tenants and I signed a contract together without an estate agent. Their contract ends on 1st July 2021.

At the time of signing the contract, I was not aware that I needed to put the deposit in to a deposit protection scheme.
I have just set up the deposit protection scheme with a government approved scheme.

I received a letter from a yesterday court stating that I needed to return the deposit back to the tenants as well as three times that amount. They also want 308 GBP for the court fees. The tenants have a solicitor.

I called the tenants yesterday and they claimed that they do not know about any claim form.
The man said that he is not aware of anything that I am saying - but his name is on the claim form as well as his signature.
He claimed that his brother had filed the form.

The court claim form has given me some option to choose from:
A) I do not intend to contest this claim
B) I intend to contest this claim
C) I intend to dispute the court's jurisdiction
D) I object to the claimant issuing under this procedure
E) I intend to rely on written evidence

I am not sure what to tick on the form and what evidence to provide.

I realise that I made a mistake by not putting their deposit into a deposit protection scheme. However, I have now done that.

The tenants still occupy the property and they are asking for the deposit now - I cannot return this as they have not yet left. I have tried to be a good landlord by addressing any issues that they have in the past. I added cladding and ventilation when there was a problem with damp.
I am a student now and do not have a job.

Thank you very mcuh, David.
Kind regards,
RM

(Who's David?)

Quote from: RM on February 19, 2021, 01:01:17 PM
I called the tenants yesterday and they claimed that they do not know about any claim form.
The man said that he is not aware of anything that I am saying - but his name is on the claim form as well as his signature.
He claimed that his brother had filed the form.

Who is the tenant. Is the brother a joint tenant on the tenancy?

Who paid you the deposit?

The main tenant paid the deposit.

The property is let to a man and his family (not to the brother).

From what you wrote, you admits to failing to protect a tenancy deposit within the time limit as required by law. You have since protected the deposit. You have not stated whether you have correctly given the prescribed information.

The penalty for your non-compliance of the law is that
* you cannot serve a valid section 21 notice during this tenancy until:
    ** you have returned the deposit to the tenant less any agreed deductions, or
    ** an application have been made to the court for a financial penalty against you, and the case is over one way or another.
* you are liable to a claim against you for a financial penalty payable to the claimant.

So one way or another, you are liable for a penalty of between one and three times the amount of the deposit. The question is whether you are liable to pay that penalty as a result of this case.

From what you wrote, a claim have been issued at court against you for a deposit penalty. You say "the tenants have a solicitor" but suggested "the man" whom I presume is either the tenant or one of the joint tenant have signed the claim form. You say the tenant is claiming verbally his brother has filed the claim, and that the the brother is not named as a joint tenant in the tenancy, and that the "main tenant" (whoever that is) paid the deposit.

A valid deposit claim needs to be issued either by the tenant or "any relevant person". Any relevant person being a non-tenant who paid the deposit for the tenant with the tenant's agreement. If there are joint tenants, they must all agree for the claim to be bought.

If the claim was bought by the brother of the tenant, in the tenant's brother name, the claim is not valid and you can defend on that basis.

If the claim was bought by the tenant, in their own name, you will lose, so settle.

If the claim was bought in the name of the tenant, without knowledge of the tenant, you have a mess.

"He claimed that his brother had filed the form" is not consistent with "the man said that he is not aware of anything that I am saying". It seems possible that the brother operated on a "I can win you this money, I'll sort it for you, you don't have to worry about the details apart from signing your name when I ask you."

I would suggest that even if there is a technical discrepancy between who filed what etc. in the long-run you had better start to prepare yourself for losing some money here.

You took a Deposit and didn't protect it in time. You've done it now, but that doesn't rescue you. You are still liable for the penalty. A Tenant does not need to have a Solicitor acting on their behalf in this situation, they can do it all themselves. Even if their current line of attack is technically wrong, they can still come back. You should be aware - and everyone you have a conversation with about this from now on - that the stated assumption of some kind of fixed penalty of 3x the Deposit amount is not factual. It can be up to that amount. So take every opportunity to press that home in your dealings with the Tenants or whoever is representing them... but... it will not be a penalty of £0 if it goes all the way... so somewhere between 1x plus the Deposit and 3x plus the Deposit you had better start thinking about.

Don't put your head in the sand. You've failed (quite badly) at some basic Landlord hygiene here... and you thinking you tried to be a good Landlord simply isn't relevant any more. Ensure you do everything by the book or it will be a nightmare to finally get rid of the Tenants when you want / need to. The way to approach this - as partially intimated above - is to try and open up a dialogue (hopefully things aren't too far along) and obtain some kind of settlement that is less than the 3x Deposit plus costs... at least then you'll have won something. Not much, but every little helps. A dialogue should be possible - as it avoids Court - and everyone should want that.

How much was the Deposit?

And if the claim form was really the first you heard from the tenant re. the claim, then I would also press home the point that they have failed to follow the pre-action protocol by going straight to court without communication first, which would go aganist them in terms of cost. More specifically, settle the penalty itself, but if it were me I wouldn't be paying the court fee since it was issued without you given a chance to settle this without the cost being incurred.

Hi Hippogriff,

Thank you very much.
Do you mean a dialogue with the tenants? I contacted them yesterday but they refuse to speak to me now.

The deposit was 650 GBP.

KTC, thank you for your help too. I've learned a lot from your response.

Quote from: RM on February 19, 2021, 01:01:17 PM
I am new to letting and do not know much about procedures.

The deposit from the tenants was put into the bank account where their rent is transferrred to. I thought this is what all landlords did.

The tenants and I signed a contract together without an estate agent. Their contract ends on 1st July 2021.

I have to ask:

1. If you were new to letting and you "do not know much about procedures", why did you not spend even just 30 minutes finding out the basics? Practically every site about letting tells you that you must to do certain things when creating a tenancy.

2. Where did you get your Tenancy Agreement from? How do you know whether it is legal and doesn't contain any clauses that are invalid?

3. Did you give correct Prescribed Information to the tenants? I'm guessing not because you did not protect the deposit.

4. Did you give the Government's 'How to Rent' guide to the tenants? https://www.gov.uk/government/publications/how-to-rent

5. If there is a gas boiler or any other gas appliances in the property, do you have a valid Gas Safety certificate and have you given a copy to the tenants?

6. Do you have a valid Electrical Installation Condition Report (EICR) and have you given a copy to the tenants?

In addition to sorting out the deposit, you may have more work to do to remedy the above shortfalls - especially if you want the tenants to leave when "their contract ends on 1st July 2021". You need to understand that they will not be obliged to leave at that date if they don't want to, and there is nothing you can do about it unless you sort out the tenancy documentation and correctly issue a Section 21 notice seeking possession at the appropriate time.

It may be wise to consider getting some professional help to sort this all out.