UK Landlord Forum / Life

Hi all
I might be a bit stupid or naive or even both
I never paid a tenants deposit in to TDS,
I DID DO THE GAS AND ELECTRICAL TESTS 
the tenants left and I have paid the deposit  back in full
but the tenants wants £2100.00 pounds back in compensation (£700.00 deposit)
do you think I will have to pay the tenants anything  or will I get a fine, there have even said there are going to contact the tax office and take me to court,  I have paid all my tax in full.
I THINK THERE ARE TRYING TO BLACKMAIL ME

You are liable for a penalty for failure to comply with the deposit protection legislation. The penalty is payable to the (ex-)tenant. The amount of the penalty is between 1x and 3x the amount of the penalty inclusive. If it goes through court, you may be liable for court cost on top.

Enforcing one's legal rights is not blackmail. Contacting you to discuss the potential claim against you is a legal requirement, and not blackmail. I don't know what deposit protection's got to do with tax.

The ex-Tenant is probably talking about contacting HMRC as an additional threat lever, assuming this Landlord doesn't do things by the book. If they do (apart from the Deposit, of course) then there's nothing to worry about (apart from the Deposit, of course). I always advise Landlords on the receiving-end of a claim or the threat of a claim to open up negotiations in good faith. First thing is to arm yourself with the knowledge that 3x penalty is by no means guaranteed - it is up to 3x - so gently disabuse your ex-Tenant of that notion - someone down the pub may have told them it's a sure thing, it isn't. But no penalty isn't possible if they follow-through. So this will be expensive, regardless... make a low-ball offer, maybe? Let us know how it goes...

I dare say going down the legal route would take a while, the way things are at the moment, so that may increase the appeal of a bird in the hand. £700 is the bare minimum a court would award. In this case they'd probably award more as you didn't protect the deposit at all, but who knows how long it would be before he gets it? If you were to offer, say, a thousand lovely shiny pounds in full and final settlement, in his bank by the end of the month, that's probably going to feel like a win for him.

The real risk is that they take the case to a no win no fee firm, who make their money by loading the case with legal fees.

Taking a landlord to court for non-protection of a deposit when it's been returned is actually quite difficult and expensive for a tenant.
It can't be done as a small claim (because no money is owed) and the process of raising a claim is something you probably need legal training to do - lots of cases simply collapse because the claim paperwork is hard to get right.

So it depends how lucky you feel.