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  • Deposit Protection

    Landlord refused to protect deposit unless tenant paid

    Hello PT Hive-mind

    I wonder if I could call on the collective wisdom to help me advise a friend?

    She moved into a rented house in Feb 2013 and was told that unless she paid an admin fee of £30, her deposit would not be protected. This was a 6 month AST which was renewed at the end of the fixed term, at which point she was told the fee was now £50 if she wanted the her deposit protected.

    From her 6 month renewal letter:

    "As discussed, if you want your deposit protected, please forward payment of £50. Alternatively I'll just leave it as it is."

    6 months later, the tenancy continued but moved to a periodic basis. My understanding is that the deposit would have to be re-protected, but no mention was made of it.

    She is now planning to move out, and is in the process of buying her own place.

    She's worried about the landlord refusing to return her deposit in full but it seems to me that he should be the worried one.

    It seems to be that he's in violation of the Housing Act 2004 and that she actually has a case against him for not complying with the deposit protection requirements.
    I've check online for her and as far as I can tell, her deposit is not protected. Even if it is, she has certainly never had any notification of scheme details.

    He's persistently been a bad landlord. Extremely slow to deal with problems in the house (some of which have still not been fixed), has let gas safety certs. expire with delays in renewal etc and pressurised her at the start of the tenancy to make rental payments in cash ( only agreed to accept bank payments when it was pointed out that this was specified in the AST agreement).

    Would I be advising her correctly, that she has a good case against him and could well get her deposit back plus penalties for non compliance?

    Very grateful for guidance here!

    Many thanks

    Jon
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    Oh! dear what a very silly LL!!!
    Perhaps he should be advised that irrespective of whether the tenant chooses to pay any admin fee for deposit protection the LL MUST by law protect the deposit and provide a DPC and PI within 30 days of deposit receipt
    He HASN'T!!
    He has now left himself wide open to being prosecuted by the tenant and will probably be granted 3 x the deposit plus the deposit amount against the LL!!
    LL NEVER seem to learn do they!!!
    This one sounds like an arrogant sod!!
    But surely the tenant expected to pay relevant fees for taking on the tenancy!!?
    That being said the LL MUST protect the deposit even if the tenant chooses NOT to pay an admin fee for it!!
    Perhaps a less combative way for this tenant to manage things is to advise the LL that providing the FULL deposit is returned then the tenant will NOT take any action against the LL for failing to protect the deposit and would sign a letter to that effect.
    Not sure whether such a letter would be legal as a tenant has 6 years to make a claim against a LL who hasn't complied with deposit regulations!!
    Changes in the law mean that no longer do new DPC and PI need to be issued for tenancies proceeding onto a SPT
    BUT they do if a NEW AST is signed EVEN if nothing on the AST has changed from the previous one!!!
    I'm NOT sure if that is 2 claims the tenant could proceed with!
    So for a £1000 deposit the LL will owe £8000!!!!!!!!!!!!!!!!!!!
    The tenant should contact mydeposits to determine whether 2 claims would be applicable as the LL has failed to protect the deposit TWICE
    This LL must be pretty stupid.
    Or just ignorant
    The tenant is in charge here and could legally take the LL to the cleaners
    It is usual for most tenants NOT to want to engage in justified legal action; they just want to vacate with their deposit without any hassle
    Apparently there are STILL some LL out there that don't know about the COMPULSORY deposit scheme and if they do; DON'T know that they have to comply even if the tenant refuses to pay a deposit admin fee!!
    A case here of the LL being penny wise and pound foolish
    I hope for his sake that this tenant doesn't wish to pursue legal action against this LL which she WILL win!!!
    As for rent payments by cash this is something the LL may ask even if the AST states by bank credit.
    It is for the tenant to decide whether they wish to comply with the LL wishes
    NO LL can force a tenant to make payments by cash!!!
    As a complete aside suing the LL could greatly assist the tenant in her new property purchase
    Perhaps she could come to an out of court settlement as a 'goodwill' gesture on the part of the LL with her signing a letter confirming FULL and FINAL settlement for his failure to comply with deposit regulations!!
    The 'goodwill' would have be a reasonable amount as the tenant could easily claim considerably more!!
    Perhaps the tenant and yourself might do the LL a very big favour in referring him to this site where he will learn an awful lot!!!
    Thereby preventing hopefully some possible future expensive mistakes!!?
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    It doesn't matter whether the deposit was protected, or not, the prescribed information giving the details of where the deposit is protected must be served within 30 days. Your friend can now bring a case in a County Court for the return of the deposit plus a penalty of 1 - 3 x the deposit.

    The issue of the admin fee is a separate issue of which you have given no details as to on what basis it may be due. Regardless of that claim's validity, it cannot be linked to protecting the deposit, although no doubt the LL will make a counter-claim for it's payment.
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    As others have said the landlord cannot make the protection conditional. Also as this is a non-optional fee it should have been advertised at the point of advertising the rent. If it has been paid it can probably be recovered under the new civil recovery powers linked to the Consumer Protection From Unfair Trading Regulations. As well as a claim for the deposit protection failure, which now arises twice incidentally so it is double the claim that Nick P has set out, your friend might care to report the landlord to the local trading standards office.
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    David Smith
    Landlord & Tenant Solicitor
    Anthony Gold Solicitors

    Find me on LinkedIn: uk.linkedin.com/in/dsnsmith

    All opinions are my own and do not reflect those of my firm. No comment made should be taken as legal advice and you should consult a solicitor or other legal professional for advice on your specific situation.
    You're correct the landlord is in violation of the Housing Act 2004.

    It's very clear cut. The landlord must protect the deposit within 30 days and provide the tenant with written details of their protection ('prescribed information'), also within 30 days of receipt.

    The Housing Act is silent on administration charges to tenants for deposit protection, but this has no bearing on the landlord's responsibility to protect.

    Her main priority is probably to get the deposit back, and if she has problems she will need to go to court. The landlord's failure to protect means she is entitled to its return in full, as well as compensation of between 1 and 3 times its value. Even if he had protected the deposit, prescribed information is equally important in the eyes of the law and the penalty would still apply for failing to provide it.

    At TDS we regularly get well meaning but ill informed landlords contacting us because they find out too late that deposit protection regulations exist. We advise them to protect as quickly as possible, and should it come to court a judge may look favorably upon this when deciding the amount of the penalty. This landlord is quite clearly trying to take advantage of your friend and ignoring his responsibilities. Giving the tenant an ultimatum over deposit protection is clearly not acceptable!
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    Thank you all for your very kind replies.
    As it happens, at the time my friend took on the tenancy, she had just left an abusive relationship with her three young children and relocated for her own safety. She was under huge financial pressure (had to claim benefits until she was re-established and back on her feet) and literally every penny counted. The admin fees may have made a difference to food on her kids table or not. Also, knowing that her circumstances were difficult and a little uncertain, the landlord insisted on two months rent up front.
    Whilst this is understandable (he has to protect his interests) this large initial payment, along with a sizeable security deposit left her extremely short of money and literally unable to pay extra fees (which BTW were only ever mentioned at the point of commencement of the tenancy- not whilst the property was being advertised).

    As a landlord myself, I always try to do the right thing for my tenants, both in terms of compliance with regulations but also in terms of just being a decent landlord. When something needs fixing or replacing, it happens and in return, my tenants always treat my properties with respect.

    My friend's LL personifies the kind of behaviour which gives us all a bad name.
    I'm going to recommend that she waits until she has a firm date for moving out and then brings a claim against him for not correctly protecting her deposit twice.

    Should I advise her to pay the admin fees at the point of doing this, or would that be irrelevant now?

    My friend is a brave and inspiring woman who walked away from an awful domestic situation with almost nothing, had to start all over again on her own with three children, and has done brilliantly in spite of bad treatment such as she has received from her landlord.

    Thanks again for taking the time to reply.
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    Nope she shouldn't pay because as others have mentioned such fees should have been advised to her before the tenancy commenced
    Bet the LL didn't give her a copy of the EPC at the viewing.......................whoops!!! that will be another fine if she reports it!!!!
    By the time she has finished with this LL he will be severely out of pocket with probably no profit to show for her tenancy period
    If she advises him of the deposit issue he might protect in some effort to mitigate his refusal to protect
    Her case against him would be best kept quiet until she has vacated
    Then hit the sod for six
    He won't know what's hit him!!!
    Bad really that a LL behaves like this
    He will get his just desserts!!
    I'm nor sure who you advise if a LL fails to comply with EPC regs: others or you may no
    It also might be worthwhile informing the HSE regarding inadequate gas certification
    Another fine coming
    All this will be good supporting evidence to prove this LL doesn't know what he is doing or if he does deliberately flouting the relevant LL requirements
    That should convince any judge to award maximum deposit fines
    Once she has won her case which she will perhaps signpost this particular LL to this post where he may learn the error of his ways!!??
    All LL should be aware that someone someday will catch you out if you are a LL
    You have to be on your game as a LL not to get caught out by a savvy tenant or a tenant who has been advised as to redress available to them
    This LL obviously thinks he is too clever by half!!
    He is due for a very rude awakening!!
    As she is on benefits the CAB will assist her with her County Court claim
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    Thank you so much Paul.
    She's no longer on benefits but your suggested approach is exactly what I'll advise her to do.

    I don't believe in karma but if I did, this would be a perfect example.
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    Jon,

    If 2 month rent was paid up front this opens a whole new can of worms. As you are getting advice from David Smith I will cede to whatever he says, but depending upon how the 2 months was taken that either counts as yet another deposit, and yet another penalty of 1 - 3 months rent, or else a tenancy with a period of 2 months not 1.
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    Thanks so much Nick

    I did think about that.

    I'll get the exact wording in the AST and post it for clarification.
    The tenancy started in Feb and the next rent payment was made in Apr so it was literally two months rent paid in advance. After the initial two months, the rent was paid on a monthly basis..

    The more I think about this LL the angrier I feel.
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    (17-08-2015 06:04 AM)paul_barrett Wrote:  Oh! dear what a very silly LL!!!
    Perhaps he should be advised that irrespective of whether the tenant chooses to pay any admin fee for deposit protection the LL MUST by law protect the deposit and provide a DPC and PI within 30 days of deposit receipt
    He HASN'T!!
    He has now left himself wide open to being prosecuted by the tenant and will probably be granted 3 x the deposit plus the deposit amount against the LL!!
    LL NEVER seem to learn do they!!!
    This one sounds like an arrogant sod!!
    But surely the tenant expected to pay relevant fees for taking on the tenancy!!?
    That being said the LL MUST protect the deposit even if the tenant chooses NOT to pay an admin fee for it!!
    Perhaps a less combative way for this tenant to manage things is to advise the LL that providing the FULL deposit is returned then the tenant will NOT take any action against the LL for failing to protect the deposit and would sign a letter to that effect.
    Not sure whether such a letter would be legal as a tenant has 6 years to make a claim against a LL who hasn't complied with deposit regulations!!
    Changes in the law mean that no longer do new DPC and PI need to be issued for tenancies proceeding onto a SPT
    BUT they do if a NEW AST is signed EVEN if nothing on the AST has changed from the previous one!!!
    I'm NOT sure if that is 2 claims the tenant could proceed with!
    So for a £1000 deposit the LL will owe £8000!!!!!!!!!!!!!!!!!!!
    The tenant should contact mydeposits to determine whether 2 claims would be applicable as the LL has failed to protect the deposit TWICE
    This LL must be pretty stupid.
    Or just ignorant
    The tenant is in charge here and could legally take the LL to the cleaners
    It is usual for most tenants NOT to want to engage in justified legal action; they just want to vacate with their deposit without any hassle
    Apparently there are STILL some LL out there that don't know about the COMPULSORY deposit scheme and if they do; DON'T know that they have to comply even if the tenant refuses to pay a deposit admin fee!!
    A case here of the LL being penny wise and pound foolish
    I hope for his sake that this tenant doesn't wish to pursue legal action against this LL which she WILL win!!!
    As for rent payments by cash this is something the LL may ask even if the AST states by bank credit.
    It is for the tenant to decide whether they wish to comply with the LL wishes
    NO LL can force a tenant to make payments by cash!!!
    As a complete aside suing the LL could greatly assist the tenant in her new property purchase
    Perhaps she could come to an out of court settlement as a 'goodwill' gesture on the part of the LL with her signing a letter confirming FULL and FINAL settlement for his failure to comply with deposit regulations!!
    The 'goodwill' would have be a reasonable amount as the tenant could easily claim considerably more!!
    Perhaps the tenant and yourself might do the LL a very big favour in referring him to this site where he will learn an awful lot!!!
    Thereby preventing hopefully some possible future expensive mistakes!!?

    Don't quote me here; but as far as I am aware if rent is paid on a bi-monthly basis then it must be for the remainder of the AST
    If rent WAS meant to be monthly paid and is indicated on AST then I'm afraid for the LL he has taken a deposit of one months rent which he has failed to protect
    So 3 claims for failing to protect on 3 occasions!!!!!!!!!!!!!!!!!!!
    So that would mean 3 rent payments for the 6 month AST
    I'm NOT sure once an AST proceeds onto a SPT whether the tenant may revert to monthly payments from the AST bi-monthly rent payments
    In my water I think perhaps a new 6 month AST with rent being paid monthly would be required to facilitate monthly rent payments!!
    But S21 would have to be served 4 months before a PO may be obtained
    Now you CANNOT issue a S 21 to commence until 4 months of the AST have been served
    So with bi-monthly rent payment a LL would not be able to apply for a PO 4 months aftr the S21 was served!!!
    As long as rent is rent and NOT to be considered as any sort of deposit then the LL would be OK though he makes obtaining a PO harder for himself!!
    It really isn't hard
    Issue a 6 months AST with rent due monthly
    Take 2 months rent as deposit
    Allow AST to proceed onto a SPT
    Job done!!
    If the tenant insists on a renewal AST then the LL may issue and charge an admin fee for a new DPC and PI
    The LL DOESN'T have to issue another AST
    SPT is fine
    All an AST does is stop a LL booting out a tenant using the S21 process until the last 2 months of the AST unless there is a break clause after 6 months for year AST's
    A tenant may leave anytime they like and there is nothing the LL can do to prevent them!!
    They SHOULDN'T as they are required to give notice and stay for the fixed term
    LL with mortgages would be unwise to offer an AST longer than 1 year!!
    Most mortgage conditions specifically prohibit AST's longer than 1 year
    This LL has made a mountain out of a molehill and just shows how things can go drastically wrong if LL fail to comply with basic AST regulations etc
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