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  • Deposit Protection

    Stolen Deposit by Agent

    Hi Guys

    I have a serious potential headache and would welcome your advice.
    In July 2009 I rented a house to a married couple and their family .
    The agents took the deposit (788 pounds)) and placed it with My Deposits.Co . The agents subsequently closed down and stole the money. I contacted the police and trading standards at the time but with no success.
    The tenants have been in the property ever since paying the due rent. In February 2015 they signed another tenancy agreement which is due to expire on the 9th February 2016.
    At the beginning of September I was informed by the husband that he had left the house after a split with his wife and that she was now responsible for the payment of the full rent (560 pounds). He cannot be contacted other than by phone . However I know where he works. I wish to end the tenancy and for the remaining tenant (the wife and her two children) to move out at the end of the current tenancy. I have however agreed to her paying me via Housing Benefit in the meanwhile until February 2016 . This however leaves me 77 pounds short PCM. Better than nothing I suppose.

    I wish to serve a Section 21 Notice but the problem is what about the missing Deposit ? Should I pay this into the DPS from my own pocket or hand it over to the tenant with proof of transfer . I have been told a Section 21 cannot be served unless the Deposit is protected . Although the tenant has indicated she is willing to move she may become awkward if she cannot find suitable housing on HB. I am of the opinion that if I put the Deposit into the DPS she would have suffered to tangible detriment should this go to court for repossession proceedings. Any views as to what I should do?
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    I would suggest contacting My Deposits in the first instance. If the money was correctly protected the scheme should be able to refund money owed to the tenant when the tenancy ends - but you do need to contact the scheme to find out their Ts&Cs and procedures for your individual situation. From what you've said some time may have elapsed since the deposit was lost, and a new tenancy has also started which may cause difficulties - but check with the scheme.

    If the section 21 is your number one priority, you shouldn't have problems using it if you protect the full amount of the deposit or by refunding the deposit in full to the tenant.
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    Thanks Chris.

    I will check this out .

    Sukhy
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    If the deposit is no longer protected, protecting it now is not enough to be able to serve a valid s.21 notice.

    You must either refund the deposit or create a new tenancy and then protect the deposit. The latter may be open to arguments in court.

    Considering that the deposit was initially protected with MyDeposit and that at least one new fixed term AST was created since then I doubt that the deposit is still protected.
    Do check their T&Cs and with them directly.
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    I would rather suspect that your deposit is protected. If it was initially protected with MyDeposits then it probably still is and so you can serve an s21. If the agent had stolen the money then the entire point of the MyDeposits scheme is to carry the insurance needed to refund that. As Chris has said I would contact MyDeposits and talk to them about it. The chances are you are not the only person they are dealing with.
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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.

    (23-09-2015 05:00 PM)dsns Wrote:  If it was initially protected with MyDeposits then it probably still is and so you can serve an s21.

    Had the deposit been protected with a custodial scheme I would have agreed (but then the money would still be there!)

    However, MyDeposit has initial requirements (to notify them) to be complied with every time a new tenancy is created (including a statutory periodic tenancy) or the protection lapses after 30 days.
    They also require a "new protection" (including payment of a fee) when a new fixed term AST is created.

    If Sukhy did nothing in Feb. 2015 when a new fixed term AST was created then the deposit is not protected.
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    (23-09-2015 05:00 PM)dsns Wrote:  I would rather suspect that your deposit is protected. If it was initially protected with MyDeposits then it probably still is and so you can serve an s21. If the agent had stolen the money then the entire point of the MyDeposits scheme is to carry the insurance needed to refund that. As Chris has said I would contact MyDeposits and talk to them about it. The chances are you are not the only person they are dealing with.

    Hi David

    Thank you for your suggestion . I phoned My Deposits this morning and was told that the agents contacted them in February 2010 to say that the tenants had left the property (which was a lie) and that they were paying them back. The lady I spoke to said I had no redress other than the Property Ombudsman Scheme.. The deposit became unprotected in February .

    Sukhy
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    That's very disappointing. The Ombudsman probably won't help as it pre dates the obligation to join and they don't hold any money anyway. I assume you have checked the agent was not a member of a professional body offering client money protection?
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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.
    Hi David

    I meant to say it became unprotected in February 2010 . Which takes me back to my original question do I hand the lump sum to the tenant or place it in the DPS from now before the s21 notice is served ? The tenancy is due to end on the 9th February 2016 so I have some time to work this out .

    Bw
    Sukhy
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    (24-09-2015 02:03 PM)sukhy Wrote:  I meant to say it became unprotected in February 2010 . Which takes me back to my original question do I hand the lump sum to the tenant or place it in the DPS from now before the s21 notice is served ? The tenancy is due to end on the 9th February 2016 so I have some time to work this out

    Then it is as per my post #4.

    Note also that you are therefore at risk of being pursued for the penalty re. non protection of deposit.
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    The husband cannot decide that wife is responsible for all the rent IF the tenancy is a joint one with both names on it AND is still in the fixed term. They are both responsible jointly until the tenancy becomes periodic and then he could unilaterally give notice that would end it.

    I suggest opening a dialogue with him to that effect, opening the door for both of them to meet you to discuss the possibility of you accepting a surrender of tenancy.

    You have the potential to persue him for the monthly shortfall - he's working so he would be able to be

    All communication should reflect the fact that they are both the tenant.....


    You could then introduce a surrender document that is full and final and incorporates the deposit - David Smith (dsns) would be a very good person to speak to about how to go about this as the document used needs careful drafting. This offers the potential to both end the tenancy early and cover off the deposit issue (perhaps against your reletting costs).

    Wife would have to agree to surrender though!
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