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tenants taking me to court for unprotected security deposit

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Author Topic: tenants taking me to court for unprotected security deposit  (Read 90 times)
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« on: July 28, 2020, 12:52:23 PM »

anyone else actually been taken to court?  What was their experience? Did the tenant win and get the full amount they requested?
Cant believe my tenants may be able to get 10k + their expenses when I bent over backwards for them and returned their deposit immediately
any advice / knowledge greatly appreciated
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« Reply #1 on: July 28, 2020, 01:58:26 PM »

any advice / knowledge greatly appreciated

If you did in fact fail to protect the deposit or service of the prescribed information correctly, then you'll lose. The exact amount to be awarded between 1x and 3x will be up to the court, there's no option for the court not to award a penalty.

English Rule, winner get cost, unless they rejected an offer to settle that they fail to beat.

Settle.
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« Reply #2 on: July 29, 2020, 03:11:53 PM »

anyone else actually been taken to court?  What was their experience? Did the tenant win and get the full amount they requested? Cant believe my tenants may be able to get 10k + their expenses when I bent over backwards for them and returned their deposit immediately.

Plenty of Landlords will have been because there is plenty of Case Law you can review, if you're into that kind of thing. You can judge from some of those your own situation, but the facts are relatively simple - if you know you didn't adhere to the requirements then you will lose the Case at Court... the question only them becomes what penalty will be awarded against you... even if you smile prettily, wear a short skirt and revealing top, giving everyone you can the wink... there's no discretion for a 0x penalty... it's 1x or more... up to 3x (per tenancy).

You may not find many Landlords on here who've been to Court for this... first reason would be because this is basic Landlording-101 and you shouldn't be making these kinds of mistakes - so it means you're either a) incompetent or b) always intended to steal their Deposit, but just got caught - neither possibility is great for you. The second reason is because we, as a group, would generally end up suggesting (just as has happened) you strive to settle... no-one should want to go to Court, to test the system... if you know you did wrong then try to settle, in good faith.

We cannot, yet, work out how you are being asked for around 10,000... that's not a sum that scares us because we know how tenancies work, how much Deposits can be and have Deposits across different tenancies can be counted differently... however, if you want to elaborate more... we would be happy to provide input. For example - how much was the Deposit in s... how many separate tenancies were there? Dates... things like that.

I'll just echo... because it's important... settle... don't let a Tenant be advised by anyone that 3x is assured. It isn't. So something more realistic and reasonable, bearing in mind circumstances, might be better.
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« Reply #3 on: July 30, 2020, 03:23:48 PM »

thank you - the security deposit was 825 and there are 4 breaches so 2475 for each of the breaches - they renewed their contract several times
therefore they are claiming an amount of up to 9900

We offered 2k and they rejected this - 6mths later we had a court order

Any help would be appreciated - thank you
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« Reply #4 on: July 30, 2020, 03:37:15 PM »

So... a lesson or two (assuming you will never not protect a Deposit again, and you've learned that lesson?) for the future... this is why many Landlords have an initial fixed term tenancy and then go to SPT (rolling)... this would have reduced your exposure here... it's also better for you in terms of control... and the small amount of security you lose in exchange is much less valuable in practice. Then... just because you have made an offer that was rejected, and you have received Court papers, does not mean you cannot continue with negotiations... and I would.

You have suggested there are 4 breaches. You don't seem to want to argue against this. The Deposit was 825... the Court must order between 1x and 3x the value of the Deposit for each accepted breach - that puts your minimum exposure (in the penalty alone) at 3,300... your maximum exposure at 9,900. Neither of these is certain. You mustn't think that, and you must disabuse your ex-Tenant of that notion if they hold it.

However... understanding the minimum and maximum exposure... why did you offer 2,000?

If they go to Court they're guaranteed almost twice that... so what is the incentive? To negotiate so low you must hope to have some dirt on the ex-Tenant, like they have a drug habit to feed, or a holiday to pay for, and they cannot resist the bird in the hand... otherwise, they're going to go for the two or three (or even one in your case) in the bush, right?

I would open up negotiations once more... but seriously.

Most people would advise something like 2x. It's a middle of the road offer. It could be something like that... or a rounded number like 5,000 (just below 2x)? 2,000 wouldn't cut it with me, I know that. You're on the back foot here, completely, and I think you should press on with some realistic negotiations because it doesn't sound like your ex-Tenants are taking a punt and are going to give up... this is real and heading your way.

At least when you're negotiating, in good faith, and offering something you've decided upon - you retain an element of control... being in Court is going to remove all of your control.
« Last Edit: July 30, 2020, 03:41:27 PM by Hippogriff »
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« Reply #5 on: July 30, 2020, 04:15:56 PM »

I hope by "court order", the OP meant the claim form and not a court order resulting from a judgment order OP to pay whatever was decided......
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« Reply #6 on: July 30, 2020, 04:29:12 PM »

Quite.
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