UK Landlord Forum / Life

i will be grateful for any input on my predicament please. it feels to be a little complicated but starting at the beginning my tenants were due to move out march 15th however when i went around to see the flat on the 16th one of the tenants was still in the flat. he had been let down by someone or other and had nowhere to go for the moment. it transpired later that he had been offered accommodation by the council on the other side of london and decided against it. i could see that he was confused and struggling, that he was visiting the council to find a resolution and decided not to be heavy handed.

he had no money to pay for another months rent so suggested that i take a months money from the deposit. i agreed to this and got it in writing that the money could be withdrawn from the dps.

so now i have a few uncertainties that i would like some advice on please.

is it acceptable to take a months rent from the deposit and write the tenant a letter confirming this and the fact that i will hold the balance until we agree another agreement or he leaves?

there is currently no agreement as the tenants gave a months notice so the contract expired already, can i serve a section 21 without a deposit with the dps or a contract?

although the tenant is a halfwit i think he is not scheming so i have sympathy but of course i must take care of my interests which feel a bit in limbo.

incidentally, they gave notice because i had asked them to stop smoking in the property and it transpired that they had told the agent that they smoked and had a cat although this information wasn't passed to me by the agent and there was no clause in the contract that said no smoking. 

that's the problem in essence.

You can take money from the deposit to offset against rent arrears. I have never done this myself, and I never want to. I look upon it as the start of a slippery slope, the thin end of the wedge, the road to nowhere... I'm sure you get my meaning. When a Tenant needs to 'dip into' their deposit to pay rent, that's only the start of your troubles.

Any agreement like this should be covered by a signed document, I'd say.

It's not clear on timings, but if there was a tenancy before and they were due to leave, but didn't, the tenancy still exists under the same terms.

You can serve a Section 21, but your deposit administration needs to be correct. Obviously it sounds like you had a deposit with the DPS, and I'll assume you protected it in time and served the PI in time and all that? A Section 21 does not depend on there being a deposit, just that any deposit has been protected correctly.

You can serve a Section 21, but your deposit administration needs to be correct. Obviously it sounds like you had a deposit with the DPS, and I'll assume you protected it in time and served the PI in time and all that? A Section 21 does not depend on there being a deposit, just that any deposit has been protected correctly.
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first things first thank you for taking the time.

now we're into the nitty gritty. i didn't protect the deposit with the DPS and it wasn't until i started following this forum that i realised the seriousness of this. so when my tenant suggested using the deposit as payment for rent i saw this as a way of trying to bury this error before any questions get asked and also a source of rental income right now which will give the tenant a month to either vacate or get some funds together. if he can find a way of recommitting then i would establish a new contract (given that one tenant has moved out this would surely mean the current one has become null and void) and this time do things as they should be done.

so i gather from your response that i could not serve a section 21 without showing that i protected the deposit which would mean that i have lost the ability to serve a section 21. fair enough, my error but what course of action is available to me if any?

If you didn't protect the deposit, you can't serve a section 21 notice until it (the deposit) is returned to the tenant. With regards to 'burying' the error - the tenant can come back to you years from now and sue you for not protecting the deposit, if they ever find out that was the case.

You could return the deposit to the tenant, and leave it up to them to decide what they want to do with it (i.e. pay you back or run off with it) and risk losing deposit amount - but this is a much safer option than you using the deposit yourself towards the rent and potentially being sued for deposit amount x3. That's not say you won't be sued even if you give the deposit back to the tenant - it's just less likely that you'll be sued for the full 3x the amount (under certain circumstances anyway, landlord law is a crock of horse shit, and you did still fail your legal obligation).

So your options are to return the deposit and apply for a section 21, and say that no deposit is being held, and hope your tenant doesn't seek legal advice - or wait until circumstances change for the tenant or allow for you to apply for possession through the section 8 route (return of deposit isn't an issue here). I had protected my tenants deposit late as I didn't know there was such a thing a DPS, but evicted my tenant through the section 8 route as they were in heavy rent arrears and the issue just didn't come up. Deposit protection should always be numero uno on your list of priorities as soon as it becomes feasible to do so.

It is not clear whether you protected the deposit and issue PI in accordance with the law

You said

"there is currently no agreement as the tenants gave a months notice so the contract expired already, can i serve a section 21 without a deposit with the dps or a contract?"

This is not the case, when a tenancy expires a statutory period tenancy is automatically created by law and all terms of previous tenancy apply.

NOTE: the notice in your tenancy agreement and the statutory 2 months notice are NOT the same thing, the notice in your tenancy agreement is not really worth the paper it is written on, what matters is the S21 notice and that can only be issued if you protected the deposit and issued the PI.  If you are late just get them done now and consider what you allowed against the deposit as a loan.  You will be able to ask the DPS to pay you the money back when he is gone.  There is no prob witholding deposit against the performance of a contract it is just the obligations of the housing act mean you MUST protect it and issue the PI.  Otherwise he can issue a counterclaim when you take him to court and leave the court with up to 3x the deposit.

Is this guy a dimwit or is he just dragging things out, he may know that you have to issue an S21 although a S8 may be more appropriate as arrears are continuing. 

On the other hand is he a vulnerable adult, normally the Council would have no obligation to house a man by himself so I would contact the Council and ask them is he is vulnerable.  If he is and is entitled to Housing benefit you can get that paid direct to you after 6 weeks of arrears.  Note you said "one of the tenants" if there were two bedrooms and he makes a housing benefit claim it will only pay the LHA rate for the area for a one bed place if that is what the chap needs (even if your place is two or more bedrooms).

Getting paid direct at least you have some money coming in, then you work with the council to get him re-housed, consider renting any additional rooms meanwhile or at least put them on airbnb.

i did not protect the deposit RICKC and therein lies my problem.  PI? not sure what this is or means.

it is actually a studio flat shared by two but one moved out leaving the other in situ, so in that sense, given that two of them have taken the contract with me i had assumed the terms of the contract to be broken once the date they gave to leave the property passed.

there are details from both replies and the thread 'inexperienced landlords' that are helpful to me so thankyou to those concerned.

Quote from: bujanin on March 22, 2015, 05:10:29 PM
i didn't protect the deposit with the DPS

Quote from: bujanin on March 22, 2015, 02:04:21 PM
I agreed to this and got it in writing that the money could be withdrawn from the dps.

You got it in writting it could be withdrawn from but it wasn't actually in?  I'm confused.

Quote from: Riptide on March 25, 2015, 12:52:04 PM

Quote from: bujanin on March 22, 2015, 05:10:29 PM
i didn't protect the deposit with the DPS

Quote from: bujanin on March 22, 2015, 02:04:21 PM
I agreed to this and got it in writing that the money could be withdrawn from the dps.

You got it in writting it could be withdrawn from but it wasn't actually in?  I'm confused.

yes i can see why this would seem confusing. so far as my tenant is concerned the deposit is with the dps and when he suggested using the deposit as rent it seemd like a smart idea to get this in writing.

Quote from: RickC on March 24, 2015, 03:33:34 AM
If you are late just get them done now and consider what you allowed against the deposit as a loan.  You will be able to ask the DPS to pay you the money back when he is gone.  There is no prob witholding deposit against the performance of a contract it is just the obligations of the housing act mean you MUST protect it and issue the PI.

if i register the deposit now, the dps ask when the tenancy started, if i am upfront and there is a clear timelapse from the tenancy starting to the present will the dps act themselves or do they overlook these things unless the tenant picks it up?

I doubt the DPS would be interested in grassing you up.

Just be aware, if you serve notice on the tenant and they try and get advice on it, or indeed you do need to get a PO then the dates and lack of protection will come to light.