UK Landlord Forum / Life

Me yet again sorry!

Are we held responsible.  I'm not in the UK, I pay a reputable management company to "fully manage" my house in the UK for me.  They, as a company do not issue the deposit notice on a yearly basis, until recently, and they have been doing this for years, they are not a new company.

They did not issue my tenants with a new deposit information when they re-signed a new 12 month contract, the money stayed in the exact place it has always been, no one had moved or touched it.

I have never had any personal contact with the tenants, that's what I pay a management company for. 

The tenants moved out, they have their deposit back etc, case closed..........but........

Now they are possibly taking me to court for not issuing the deposit information when they re-signed the contract!!!!

Any advice appreciated

Buck stops with the LL unfortunately - You'd have to counter sue the agent for not doing their job I guess.  They should know the procedure more than anyone.  So sad.

Thanks for the reply Riptide.........I am honestly struggling to come to terms with this........what the hell am I paying them for

Is it ok to share this with you.......if not, then just delete it...... It's from my agents website.....


Full management

If you don't live near your property, or don't have the time to deal with issues such as finding suitable tenants, collecting rent and arranging contractors, this service is ideal for you. Under this Full Management option,we take care of everything. You can just sit back and enjoy the income your property generates.

Quote from: Landlady1977 on October 03, 2014, 03:12:38 PMAre we held responsible. [snip]

Any advice appreciated

Yes, you're responsible. Advice would be to try and settle... is it possible?

The amount they want is not possible by me........I don't have a spare £3k+ sitting around........up the creak comes to mind lol

What was the deposit amount?

£1,290

OK...

So, are the Tenants thinking that they are likely to be awarded 3x the deposit (£1,290 x 3 = £3,870)? Or, is that the figure the Tenants say they will settle for?

Both of these seem unrealistic.

If they believe they are likely to get 3x the deposit value and if you have the chance to communicate with them, you should ensure they are corrected in this. The 3x penalty is obviously going to be reserved for the most extreme cases... cases where the Landlord is a habitual non-protector of deposits or where other bad behaviour has occurred.

Your situation appears to be that the deposit was always protected and protected correctly... only at the end of one fixed term and the start of another did the Prescribed Information not get re-served - as it should be. The deposit was always protected and was always safe.

However, if in front of a Court, you cannot fail to lose the case - because (as you have had drilled home by now) you have failed to do something you should have done. And, again, (as you've had drilled home) it's going to fall to you - not your Agent.

I cannot envisage that a Court would award 3x the deposit for this. I also see other extenuating circumstances (centred around you employing an Agent for this full management service) that would mean leniency is the order of the day.

So - nothing is ever for sure - but I would be thinking a Court is more likely to decide on a 1x penalty.

So... £1,290... not £3,870.

Taking this into account... my first course of action would be to formally write - and keep a copy - to the Tenants with a settlement offer of £1,290... or possibly £1,000. In that letter you can admit that you are at fault. You can re-iterate that their deposit was always protected. You can state that you genuinely believed that the Agent would look after this for you. For all these reasons you feel that the Court is only likely to award 1x the deposit and, therefore, to avoid going through the Court system you are willing to offer £X (whatever you decide).

This will be in your favour in the long run as you can also show this to the Court - the fact that you admit liability, but do not see the mistake you have made as something egregious or, indeed, wilful - and you even offered 1x the deposit (or whatever amount) to the Tenants in full and final settlement but, instead, they were greedy and hoped for more... even though they weren't even inconvenienced, never mind suffer any actual loss, by your mistake.

I think that would put you in a good position whereby a Court only awards 1x to the Tenants... just always remember, it can't be 0x.

Any thoughts?

Can that kind of settlement be something you can consider? If not, you truly are up Shit's Creek, as that is the kind of amount a Court will be forced to award.

Always remember - someone may be advising them that "it's 3x wot u get"... but it isn't... it's 1x to 3x... and for 3x you have to be a bad Landlord. If we accept everything you say, you are not...

P.S. - deal with this first and get an outcome, of some kind, then start to worry about your Agent and their [perceived or real] failure in this. Focus the mind.

Thanks for the reply Hippogriff, I really do appreciate your words.  I'm not a bad landlord, I just didn't realise I had to double check what I am paying someone else to do.

It's such a worry I could really do without, and I hope, by posting this, it will help others along their way if they are using an agent.

They haven't set a figure yet, but I'm guessing it will start at the deposit price first.

Quote from: Landlady1977 on October 03, 2014, 04:39:06 PMThey haven't set a figure yet, but I'm guessing it will start at the deposit price first.

The Tenants? Do you mean the Tenants haven't yet asked you for a settlement figure, just threatened Court, but you think it will be £1,290? If so, then I would take it... although you might be tempted to haggle down... at it's the best you can hope for if it goes to Court. Best of luck.

You said

"Now they are possibly taking me to court for not issuing the deposit information when they re-signed the contract!!!!"

So I am guessing they are trying it on with a "letter before action"

You ARE completely liable, BUT you can take legal action against the agent for failure to perform contractual obligations to the tenant as agreed in your contract with the agent.

A Judge will always look at intent, most are more worried about dodgy Landlords who do not protect the deposit or never issue PI, neither of which is the case here.

The deposit has been returned so they are not out of pocket, they WERE served with PI on the former tenancy and if the terms of that deposit scheme say that if subsequent tenancies are entered into that are substantially the same they are also protected by the scheme and those are the terms that were served with the PI then one might argue that the tenant could have asked the deposit holder they were aware of whether their deposit was protected.

So here is how I would handle it

1. Write a letter to the tenant saying that you have taken advice and believe that their case is without merit because the deposit has been returned and they were served with PI so they were in a position to make enquiries when they signed the new agreement if they had any doubts that their deposit was protected or indeed contact the agent.  Tell them that any claim will be vehemently defended and you will seek your costs as you believe their claim is vexatious.  Explain that you will have to instruct a lawyer and you are reliably informed that the cost of a Lawyer and Council will be around £2000 in addition to any Court costs should they lose.

2. Write a letter to the agency confirming that they agreed to fulfil all of your legal obligations under contract and that you will be holding them legally responsible for all costs related to this matter.  Ask them to agree in writing to pay any costs or else you will be forced to take legal action now so that you will not be out of pocket.  Say that you do not have the funds to pay the claim and may have to take out loans to fund this for which you will hold them responsible.  You can ask them to respond with their firm proposals for protecting you from the consequential loss from their incompetence.

Even if the tenant won they get a Judgement, they have to enforce that Judgement with bailiffs which takes time.  In such an event you can tell the tenant that you are suing the agent as you do not have the money and the money will be paid soon. So they would probably not instruct bailiffs.

The tenant is looking for a quick buck, you show them that they may have some risk too and they may back off, the agent may decide to offer an ex-gratia payment in full and final settlement of any claim against you.

RickC - what are you talking about with "should they lose" and "Even if the tenant won"?

If this goes to Court there is no discretion and the Court must award at least 1x. Please don't give advice that may create false hope. The best bet for the OP - to avoid doubt - is to stop this going to Court... or just hope it doesn't. We obviously don't have all the facts but the OP can either stick their head in the sand and hope it goes away, or get more pro-active and try to find out if the Tenant is willing to accept a sum in full and final settlement. Brinkmanship along the lines of "take me to Court, you might lose and also have to pay my costs" is probably going to backfire. If the Tenants in this case have taken any advice or done the smallest amount of research on the Internet, they will know the OP is on the back foot here.

I stand by all I said, this is a try on.

A Judge "MUST AWARD 1x Deposit" IF and only IF he finds that the landlord has failed, he can "find" that it was not the case, I have been in Court when this has happened.  I have seen cases where

Changes in Court fees and restricition on Legal Aid mean that it is expensive to bring such a case for the tenant, especially after the event when they have their deposit back, there was an £18k high court case where this was thrown out.

Your are RIGHT that the idea is to avoid Court, I think that the tenant is after an easy killing and in the same way the OP should at least call their bluff whilst protecting themselves by issuing formal notice to the agent that they will be holding them responsible.

If they are serious they will come back with something else before filing and at that point the OP can say that they have spoken to the agent as outlined below.

Sticking head in the sand is never the best option, but if you just offer money they will ask for 2x or 3x on the basis that it will cost you to defend the action and you may end up paying both your and their legal fees.  It really is by no means certain and the point I make above are valid.  There is legislation for when tenancies are substantially the same, i.e. they carry on from the previous one.  If the PI had never been served then they would be in trouble but as this case is effectively underwritten by Andrews the OP has nothing to lose in standing firm.  If their tenant read it on a blog somewhere they may decide it is not worth the trouble, remember it works both way, if they lose they pay legal fees, so getting a good housing lawyer increases the stakes and if all fails Andrews will have to take responsibilty.  Of Course on reading the letter from the OP the agent may decide to offer the tenant something but if you show weakness people take advantage.

Thats interesting Rick, as what you say makes sense, and I do think most Courts TRY and make sense.

I would not pay them a Penny, and tell them to take it up with the Agent.

If landlords start paying up as Hippo keeps telling them too, it will be the new Compo culture.

At no point were the tenants disadvantaged, or suffered, call there bluff.

Thanks for your reply Boboff, it's nice to read reassuring stuff personally I have no intention of taking the blame for the agents, but how I go around it, hmmmmm, well that's something I will need to think about.

Quote from: RickC on October 04, 2014, 12:08:05 PMA Judge "MUST AWARD 1x Deposit" IF and only IF he finds that the landlord has failed, he can "find" that it was not the case, I have been in Court when this has happened.  I have seen cases where

I am incredibly interested in this - can you provide further details, like a case reference that we can search on? Jones vs. Smith or whatever?

Everything out there says that if a case reaches Court and the deposit protection laws were not followed correctly - whatever the excuse might be - then the Court will have to award a penalty between 1x and 3x the amount of the deposit. I have never - ever - heard of a case where the deposit was not protected correctly and the Court found that there was nothing to be done.

Quote from: boboff on October 04, 2014, 12:21:17 PMThats interesting Rick, as what you say makes sense, and I do think most Courts TRY and make sense.

I would not pay them a Penny, and tell them to take it up with the Agent.

If landlords start paying up as Hippo keeps telling them too, it will be the new Compo culture.

At no point were the tenants disadvantaged, or suffered, call there bluff.

But this is simply bad advice - why would the Tenant take anything up with the Agent regarding protection of the deposit? It's got nothing to do with the Agent. The Landlord is responsible. The Agent isn't responsible. So why would the Tenant even bother taking anything up with the Agent? I think you are OK giving out advice like this when it's not your money at stake... but if the Tenant is doing any amount of simple research themselves, or - horror-of-horrors - taking advice from a legal-beagle - then they will know what they are doing and who is responsible - the Landlord.

Landlords aren't paying-up because it's a compo culture - Landlords are paying up because they've broken the law. It doesn't matter if the Tenants were disadvantaged or have suffered... their deposit wasn't protected correctly therefore they are due a penalty. What I am suggesting is a settlement. That settlement - even if refused by the greedy Tenant - will put the OP in good stead if the case goes to Court.

I'm a Landlord myself, obviously, and whenever anyone asks about getting into this gig - one of the first things I tell them about is the deposit protection stuff. It's the most costly potential mistake a Landlord can make. You don't get the same kind of fine for not having produced and shown an EPC to a prospective Tenant.

Calling their bluff is much the same as putting your head in the sand. Writing to the Tenants saying "I don't consider myself to be liable and won't pay you a penny" is suicide if the Tenants have any knowledge at all. That would harm the OP's case if the situation then reached Court.

The OP must - by now - know that they are in the wrong. The question we are all interested in is - what is now going to be done about it?

Quote from: Landlady1977 on October 04, 2014, 12:36:14 PMpersonally I have no intention of taking the blame for the agents

Agents are not responsible for protecting deposits - Landlords are.

You may think and hope that your Agent was responsible, but they weren't.

What do you think would happen if you thought you'd instructed the Agent to handle the deposit, but the Agent forgot to protect it, or they didn't protect it in time, or they didn't serve the right information, or in time, or they just ran off with the money and disappeared, or they went bust?

Correct... you (the Landlord) are ultimately responsible.

Just to back what I wrote up... this is from my|deposits...

Even though you have instructed a letting Agent to protect the Tenant's deposit, you are always ultimately legally responsible for the deposit and its return to the Tenant at the end of the AST (if they are entitled to it). Unfortunately if the Agent becomes insolvent, acts fraudulently or ceases trading you, the Landlord are liable by law for the return of the deposit to the Tenant, which is why we strongly recommend you use a reputable Agent and ensure they use a segregated bank account. It is also the ultimate responsibility of the Landlord to ensure that the deposit is protected and that certain key information about the deposit protection called the 'Prescribed Information' is passed to the Tenant.

...I hope it helps in understanding this. I think you will have an excellent Letting Agent (one to never let go) if they hold their hands-up and help you out here. If they agree to assist you in anything that [may] come from this... settling or agreeing to assist with any penalty if it ever comes to Court, please PM me their details... they will be a really good Letting Agent to know about.

At the end of the day, as far as due legal process is concerned, "ignorance of the law is no excuse".

It is what it is.  Even if the Agents explicitly said they would take care of Deposits, that still does not mean it is not the responsibility of the LL to make sure it is done.

Right.

I understand you are technically right Hippo. And you need PROOF.

Rick has been in court, and the issues you raise are not valid according to him.

It has been mentioned this aspect of law is daft, and will be amended at some point.

On that basis I do not see calling there bluff as you quite rudely put it, as burying your head in the sand, it's just part of the game we play when negotiating with Numpties.

I say take it up with the Agent as we have paid the Agent to deal with this shit, and they should, legally or not, rightly or wrongly, they should.

Life is not black and white, but a series of grays........

Queue now your 5 unanswered replies to the same point.....


Oh plus I am very bored with the 10 threads on this subject we have been forced to read through and comment on.....Bored......


I have just included a few smilies in case I come across more angry or annoyed than I intended, I do respect the fact you are very professional Hippo, Good man.

I'd love to see some examples (or even 1) of where a Landlord has failed to protect the deposit correctly and a Court has come back and said "no, you failed to adhere to the law, but I - as the Judge - conclude that there's nothing to pay here".

It would blow everything I believe I know out of the water.

Please let's get examples... then I can alter my position as a precedent has then clearly been set. But, without examples, I must stand by what I know and everything out there says.

You can be bored, as it's not affecting you... it's not affecting me - but I don't want someone to follow advice that says "call their bluff" and then end up with a >1x penalty from the Court when they do. Please understand - I'm not on the Tenant's side here - I'm not encouraging people to get free money when they don't really deserve it - I am trying to get Landlords to see sense and understand that if this does go to Court the minimum they will suffer is 1x... so - bearing that in mind - I strongly advocate settlement as a means of a) limiting the damage and b) of closing off the sorry episode once and for all. However, once RickC brings back details, I'll be suitably corrected... and I will love it, too!

I am not angry or annoyed either - as I say, it doesn't affect me.

"burying your head in the sand" is not rude?

It is if you have no pants on.

Alright, I'll concede that point... if... but we don't know whether the OP will have pants on when they're burying their head in the sand.

You cant beat a bit of Bully.