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Unprotected deposit - money claim received

Started by Mass, April 01, 2019, 12:55:05 PM

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Mass

I forgot (first time and my fault entirely) to protect my tenants deposit. When the tenancy ended last August I deducted £60 of the deposit and returned the rest. (The property was left in a mess but I realised I had forgotten to protect her deposit and didn't want any hassle). She wasn't too happy with the deduction but agreed in writing to accept the small deduction.  End of.... or so I thought.

I have since received letters from a No Win No fee company demanding the £60 plus 3 x deposit = £1500 and no suggestion of negotiation. I have now received a money claim for the same amount.

There does not appear to be any space for me to negotiate at this stage.... any advice would be appreciated. It seems I have to pay the £1500 plus costs in any event? I class myself as a good landlord with my tenants best interests and safety as a priority. I have never had any tenant disputes up until now.  I am hoping to negotiate but it looks like it might be too late. I have other current tenancies where all paperwork and landlord obligations have been complied with as they should be.

Please advise. Thank you.

Hippogriff

Let's just deal with the Deposit amount and penalty amount in isolation, costs being different. It does not mean you have to pay the £1,500 in any event. Just because someone is claiming 3x the Deposit amount doesn't mean the Court would agree with that. If things are as you say you are then it feels (anecdotally only) that the penalty would err more towards the 1x penalty.

This means there is room for negotiation. You have the contact details of the people chasing (firm or Tenant) and I would immediately write back, in good faith, offering a settlement amount that makes sense... usually this means at least 1x, probably more, and a bit less than 3x (as that is your effective maximum exposure and there's not much point offering more)... most people think this usually ends up being 2x. If the firm has advised the Tenant that 3x is a shoo-in is advising them incorrectly... you should lay out the facts and, if you can be bothered, cite other Case Law where similar situations have resulted in a penalty of 1x. Make your (possible) 2x offer seem like an appealing and easy-win.

Lastly, I believe the £60 is yours... it was an agreed deduction... I had always read that the Deposit would be ordered to be returned "in full or with such deductions as are agreed between the landlord and tenant"... this is such an agreed deduction, seemingly. However, the £60 seems important to your ex-Tenant, maybe time to just give up on it anyway?

heavykarma

Personally,I would have let sleeping dogs lie,and not taken any deductions.It might have been just enough to aggravate her.I would offer to return that sum,plus 1x deposit.Obviously she will not be mentioning that she is open to negotiation,to see if you just cough up.Your previous unblemished record would count in your favour,and I would mention that with your offer.

Simon Pambin

Was there a reasonable interval for you to respond between the letter from the claims company at the court claim? Did you do anything during that time? Acknowledge service of the claim - that buys you a bit of extra time to plan your response, and get in touch with the claim firm pronto. Offer them about half what they're asking. It's in nobody's interests for this to go to court.

KTC

Is it a moneyclaim (using MCOL?), or a landlord and tenant claim under the Part 8 procedure? The potential cost consequences are very different.

The £60 is yours, the deduction was agreed. While the court have the power to order its return under s214, the tenancy has finished so it's a discretion not required. They're not going to order its return when it's been agreed. I just hope you have that agreement in writing.

Mass

Thank you for ALL replies, very helpful.

It is an MCOL Money Claim not under the Part 8 Procedure. It is the No Win No Fee company who are demanding the 3 x deposit. I have heard nothing from my tenant at all since I returned her deposit (minus the £60 which I agree I should have swallowed as it probably did serve to aggravate and possibly trigger this situation). I do have an email from my tenant politely agreeing the £60 deposit deduction.

I will look at contacting the No Win No Fee Company to potentially negotiate.

KTC

Foolish company, and lucky you.

Small claims moneyclaim means basically court cost only. Check the claim form to see who you're meant to be communicating with. Unless a company which has rights to conduct litigation is on court record as acting, and that they have indicated that they are to accept service, your communication by default is directly with the claimant i.e. your ex-tenant.

I would argue that the fee you should potentially be liable for is the claim for the £60 (=£25 online claim fee), rather than £105 online claim fee for a claim of £1,560 as a penalty deposit claim is explicltly required to be Part 8, but you probably don't want them to try to withdraw the present claim and submit a new one correctly, so probably just eat the extra £80 here.

Make a sensible settlement offer (i.e. >£500 and <£1,500) + possibly the court fee. If they're being silly and insist on the full £1,560, you may want to take it to trial since you don't have to worry too much about the cost that would arise, just the issue and also a hearing fee (£25-£170).