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  • Deposit Protection

    Tenant wants to use deposit as last payment

    Hi all, 

    I am a landlord and have a house rented for 2 years to the same family .

    The tenant is now leaving as he managed to get mortgage for his new property .

    The tenenet gave the notice as required , hence leaving at the end of Sep.

    The problem came to place when he said to me that he would not be able to [pay last month rent as he could not potentially maintained his first mortgage payment and rent at the same time .

    He requested to take the rent our from the deposit which is one month rent, which i declined as i did not want to loose my protection .

    As the property is now marketed, I had a viewing accompanied by the agent . The feedback was, the property in bad condition . However the tenant said that he had booked for somebody to come and redecorate the property next week and he would make sure its going to be in good condition . He also said he would be happy t o give his new address to us .

    Not sure what the best approach to this . Please help

    Thanks

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    Don't allow the deposit to be treated as rent, for the reason you gave in your fifth sentence.

    Have the property inspected and make stoppages accordingly. One month rent is minimal anyway - six weeks should be the minimum.

    If there is rent or deposit default, pursue through the SCC while pointing out to your ex-tenant that a CCJ is going to prevent him remortgaging.

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    my concern that if i do that then he might not do any fixes as he said and ended up with more losses 

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    It doesn't really matter whether he defaults on the rent or defaults on the damage, does it? But the fact is you can't get your money out of the TDS unless the tenant agrees whereas failure to pay rent is easily evidenced.

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    He offered to accept  getting the rent from his deposit though by giving a consent to the deposit people .

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    As soon as he misses rent payment for last month (ie day after due) issue s8g10.  Yes, s8g10 may be validly served if only 1p is underpaid for only one day.  Explain, verbally, to tenant that s8g10 expires after 14 days & you will be applying to court for eviction & £££: But would he like to pay to avoid this & court fees & CCJ.

    Yes I know it ain;t going to happen before they go &  v unlikely to succeed with just g10 but for the cost of a bit of paper & a stamp it's worth a chance it might "prompt" them.

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    my concern that if i do that then he might not do any fixes as he said and ended up with more losses

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    I'd not market the place until they'd gone, but hey, your choice!  You don;t actually know when they are going, nor what work may or may not need doing.


    For myself I'd be extremely relaxed about them leaving owing £££ for one reason or another:  They will be owning a property so, sue under MCoL, get judgement, he gets CCJ, you put charge against property: The debt then increases @ 8% pa: Where else do you get government-backed 8%?  Money in the bank, but you may have a wait - the CCJ actuality/threat will "prompt" him to pay fairly quickly.

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    I have stopped marketing it as a result of that viewing .

    My agent seems to thing that he was genuine when he said he was goingh to have somebody to redecorate it next week . My agent said that he did not doubt that .

    If i take his address , how can i make sure that s actually his new right address to fake one ?


    going through the a court and stuff like that might put him off from fixing anything as he claimed and thats why I  m  not sure what rout should i go with

    But if i decided to dpo that , whats the first step please as I ve never done that before ?

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    Contractually, the tenant's obligation is to leave the property as they received it at the start of the tenancy, with an allowance made for wear and tear over the course of the tenancy, and also allowing for the age and condition of contents and decoration at the start of the tenancy. If you have an inventory and check in report/schedule of condition, you can use this to remind the tenant of the standard and cleanliness in which they need to leave the property. Check out our end of tenancy guide for more top tips and best practice https://www.tenancydepositscheme.com/res...idance.pdf

    You are not obliged to take the rent from the deposit if the tenancy has not yet ended. The deposit is there for the landlord to call on once the tenancy has ended, if the tenant has failed to keep their end of the bargain.

    When the tenancy does end, if the tenant fails to pay the rent, and/or fails to return the property to the required standard, you will be able to claim against their deposit. TDS provides a useful deposit deductions template  to members of our scheme, that is a great tool for setting out what you want to claim as the landlord and why. Assuming that you are a member of a deposit protection scheme, any unresolved dispute can be referred to them for an impartial adjudicator to decide what should happen to the deposit.

    If the amounts you want to claim are higher than the value of the deposit,  a deposit protection scheme will not be able to more than the deposit itself. You would have a choice about how you wanted the deposit to be applied - commonly landlords prefer the deposit protection scheme to adjudicate on damage and cleaning type claims first, so that any rent not covered by the deposit can be pursued in court. Your tenancy agreement should have a clause setting out what the dpeosit can be used for.

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    I have no direct experience of this situation, but to me it seems logical to have him pay you the final month's rent instead of having the property redecorated and then take the cost of any remedial works from the deposit. If there is any shortfall you can pursue him through the County Court system. I would ask to see a letter from someone, say the lender, showing the address of the new property to verify.

    If anyone disagrees or sees a way this would not work or be wrong, please comment. I may learn something!

    Good luck, Londongeek!

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