UK Landlord Forum / Life

Hi all,

I have a situation where a tenant staggered their deposit and i stupidly missed the 30 day period to use a secured deposit scheme. The tenants have been in the property since Feb and have never paid on time. After 3 months they stopped paying altogether. After speaking to the RLA they advised us to use the tenants' deposit against their rent (which the tenants requested) meaning I no longer have any deposit. This allowed me to issue a section 21. I am also now serving a CCJ against non payment of rent. The tenants have now asked me to provide details of their secured deposit scheme, which I obviously don't have. I'm now in a position where I feel trapped due to being negligent. What can I do?

Many thanks

I am no expert, and there are others on here who are; however my understanding is that

As you did not register their deposit, you can only issue a section 21 if you have first repaid that deposit in full first.  Using the deposit to cover late rent may not be the same as returning the deposit.

If you did not register their deposit within 30 days of commencement, the tenants can sue you for between 1 and 3 times the deposit (this does not include the original deposit)

Despite that it seems that you have no option but to continue to get them out.

So... a) the Tenants know that you, with their blessing, used their deposit to offset their rent arrears, and b) now want to know details of the scheme used for a deposit that no longer exists (or is theirs)...

...am I correct in thinking that they are now simply out to cause you trouble? I'm guessing they're quite desperate.

The simplest fact I can ascertain from this is that 1) there was a deposit and 2) it was protected at some point later than it should have been, 3) that deposit has - effectively - been repaid (the fact that the Tenants then used it to pay rent arrears is by-the-by) and 4) you still did not protect the deposit correctly (in time) and this leaves you open to being sued.

1 and 2 and 3 and 4 are kinda separate things... and 4 on its own means you can be sued as you broke the law. It might seem like an admin. error and there are extenuating circumstances (staggered payment) but it's still going to be black and white in a Court.

However... my question is - if you provide nothing you're opening yourself up to being sued and being uncooperative to boot, but if you provide details of where the deposit was protected at some time (historically, of course) then you can see where you go from there. My assumption is that you protected the deposit in the way it should have been some time after 30 days and provided the Tenants with the Prescribed Information and Scheme's Ts&Cs at that time as well, right? The way the Tenant is asking for this information, well... you could read that they knew nothing at all about the deposit and you had failed to deliver them anything.

What are the facts?

Your thread starts out by saying "i stupidly missed the 30 day period to use a secured deposit scheme" does that mean you then simply did not bother? You can protect a deposit late, of course, and that would be a better position than you not protecting it at all, which I'm starting to think you might have done. But you do also say it's a "secured deposit dilemma". Let us know.

Hi Hippogriff,

Thanks for your reply. Yes, they're out to cause me as much trouble as possible. I just want them out of the property now.

I didn't secure the deposit. It's my first time doing this and I was told it was too late after 30 days, so I didn't know what to do and left it in my account. Stupidly. I was under the impression (I did take some advice on this) that it was not possible after 30 days, or that even if I did do it that it would not be valid and I would still be liable?

You'd still be liable, yes, but there's a difference between a Landlord who protects a deposit late with some pretty good reasons and a Landlord who appears to make no attempt to protect but admits that they know all about the law.

Your options appear to be along the lines of... ignore the Tenant request and hope it goes away, answer them and see where they intend to take it next, answer them and make them an offer in full and final settlement. As you admit and accept... you have been negligent.

Don't let them assume you are liable for 3x. You're not. Obviously it's up to 3x. But it can't be less than 1x. That said, if it ended up in a Court, who can say how it would go down... after all, you simply didn't protect the deposit.

I would not want to go to Court.

None of this affects what you're doing to get your property back.

I have emailed back to say that I did not secure the deposit but that i have returned it when they requested it be used towards their rent arrears. I am trying to be as transparent and honest as possible so that there is a clear trail and no denials on my behalf.

After they used their deposit I waited a month until they wear in arrears again and issued a section 21. The date on the S21 is Sept 30th, so what happens if they don't move out then?

As I have already started court proceedings to reclaim the rental arrears, I am guessing they'll be counteracting that now with regards to the unsecured deposit.

Quote from: daddylonglex on September 17, 2014, 07:50:51 PMThe date on the S21 is Sept 30th, so what happens if they don't move out then?

If they don't move out you start possession proceedings... possibly culminating in a scene from Channel 5's "Can't Pay We'll Take It Away".

Based on their next response to you... you should probably give serious consideration about whether you want to come to an arrangement with your soon to be ex-Tenants. They've done something wrong - not paid their rent... but, sadly, you've also done something wrong - not protected their deposit. I'm not saying these things are equal.

You have done all you can.

Just sit and wait, set in writing also the time you will attend to collect the keys etc, give them as much warning that you are coming.

Personally I would also plan to get a locksmith to come with you to change the keys after they have left.