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View Full Version : Can a Tenant claim 3 x tenancy deposit after tenancy ended?



Scruffy234
06-07-2009, 13:34 PM
My tenant has vacated my property and i have paid back in full his deposit, the house wanst spotless but, when i came to look at the dps scheme it wasnt there, i had not transfered it over, i had forgot, so i sent the tenant a cheque and thought that would be it, he is now claiming the 3x but he is asked for payment out of court first, can he do this now? or should i take it to court?

jeffrey
06-07-2009, 13:37 PM
Once you have repaid T's deposit, he has no real claim against you for the 3x civil penalty. There are many existing LZ threads about this.

mind the gap
06-07-2009, 13:39 PM
My tenant has vacated my property and i have paid back in full his deposit, the house wanst spotless but, when i came to look at the dps scheme it wasnt there, i had not transfered it over, i had forgot, so i sent the tenant a cheque and thought that would be it, he is now claiming the 3x but he is asked for payment out of court first, can he do this now? or should i take it to court?

Cheeky blighter. I think he is trying it on and you should not worry too much. The whole point of the DPS is that unscrupulous LLs should not be able to keep their tenants' deposits unfairly at the end of the tenancy. You have not kept his deposit; you have refunded it in full, without, it would appear, having to be nagged. The principle has been adhered to, albeit unconventionally.

If I were you I would not even consider 'settling out of court'. This almost smacks of blackmail. If this tenant were able to persuade a judge that he had a case, I would be amazed. Normally the penalty is only awarded against LLs who have not protected or repaid the deposit by the time of the hearing. If you point these things out to your tenant, I would be very surprised if he proceeds with his ridiculous action.

jeffrey
06-07-2009, 13:54 PM
My tenant has vacated my property and i have paid back in full his deposit, the house wanst spotless but, when i came to look at the dps scheme it wasnt there, i had not transfered it over, i had forgot, so i sent the tenant a cheque and thought that would be it, he is now claiming the 3x but he is asked for payment out of court first, can he do this now? or should i take it to court?
Was the letting an AST? If not, you could never have protected the deposit anyway.

Scruffy234
06-07-2009, 14:06 PM
It was an AST, I am just doing a letter to him, lets see what happens. Thanks everyone for your quick response

awt19
06-07-2009, 16:02 PM
Once you have repaid T's deposit, he has no real claim against you for the 3x civil penalty. There are many existing LZ threads about this.

Why? The sanctions arent for failing to return the deposit, the sanctions are for failing to protect the deposit. The fact the money has been returned is irrelevant. And there are cases on here, and other sites where the LL has had to pay the 3x deposit, even after having paid the deposit back.

For example (http://www.consumeractiongroup.co.uk/forum/residential-commercial-lettings/178590-no-dps-awarded-court.html)

If a burglar robs a bank, and then gets caught. Is there no crime committed if he returns the money?

As the Act states, an application can be made on the grounds that the deposit wasnt protected, and then if the court is satisfied it wasnt protected, then the court must rectify the situation and the court must also award the 3x compensation. There is no provision for a return of the deposit to mitigate the offence.

Remember that it is a strict liability offence, ie there is no excuse for not knowing about what you had to do.

What if the LL had gone bankrupt with the tenants money during the tenancy? The tenant would have lost their money. Is it fair that the tenant had to unknowingly take this risk on?

There are reasons why this law needs to be enforced, or is it simply a recommendation that doesnt need to be followed? A law is a law is a law! No excuses!

Soot2006
06-07-2009, 16:13 PM
Has he cashed the cheque?

jta
06-07-2009, 16:32 PM
Why?
If a burglar robs a bank, and then gets caught. Is there no crime committed if he returns the money?



Not quite the same thing though is it? The idea of the DPS is to stop rogue LL's making off with deposits, a civil matter. Your hypothetical burglar at the bank is committing a criminal act.

harry1001
06-07-2009, 16:41 PM
Has he cashed the cheque?

good point.

The OP should check (!) that the cheque has cleared before writing to the ex-T, otherwise he could claim that he hasn't received the deposit back.

harry

awt19
06-07-2009, 16:44 PM
Not quite the same thing though is it? The idea of the DPS is to stop rogue LL's making off with deposits, a civil matter. Your hypothetical burglar at the bank is committing a criminal act.

The point being that a statutory requirement was not met.... it doesnt change the fact it wasnt met by returning the deposit does it!

Or are you suggesting the Housing Act 2004 is simply a recommendation that Landlords can chose to follow if they want to?

jta
06-07-2009, 17:08 PM
The point being that a statutory requirement was not met.... it doesnt change the fact it wasnt met by returning the deposit does it!

Or are you suggesting the Housing Act 2004 is simply a recommendation that Landlords can chose to follow if they want to?

I'm not suggesting anything, the fact is that where the deposit has been returned in full, the courts do not generally impose the penalty. The penalty of 3x the deposit is not a fine by the way, but is awarded directly to the tenant. That has encouraged the greedy types of behaviour that we see too often on this forum. In fact I think that a lot of Uni's have notices stuck up everywhere actually encouraging the students to do just that.
It's one thing to have a penalty aimed at LL's, why not a similar swingeing penalty for tenants that do not use their HB/LHA for the purpose it is for?

Incidentally, the little curly thing on your keyboard is an apostrophe, why not use it occasionally.

mind the gap
06-07-2009, 17:14 PM
awt, the link you provided just goes round in circles and does not seem to lead to details of any cases where a LL has been penalised after having returned the deposit in full at the end of the tenancy, even if he failed to protect it during the tenancy.

Please could you provide a link which does?

I am curious to see one, since it was my understanding that no case had gone this way yet.

awt19
06-07-2009, 17:50 PM
Please could you provide a link which does?

I am curious to see one, since it was my understanding that no case had gone this way yet.

Apologies, I meant to post this link...

try this one... (http://www.consumeractiongroup.co.uk/forum/residential-commercial-lettings/206743-how-ensure-3-times.html)

Read post 14 from natalie.

awt19
06-07-2009, 17:55 PM
the fact is that where the deposit has been returned in full, the courts do not generally impose the penalty.

Care to supply us with some evidence of your facts? You'll see the case linked to above shows the opposite.



Incidentally, the little curly thing on your keyboard is an apostrophe, why not use it occasionally.

Curly? Nah... Id say an apostrophe is more straight than curly. I think youre thinking of a comma.

mind the gap
06-07-2009, 18:17 PM
This doesn't actually seem to be a clear-cut case such as OP's.

The general consensus over the last few months seems to be that it is a pig's ear of a piece of drafting which judges seem to be interpreting in different ways.

In theory OP's tenant could bring a case against him, but I agree with jta that this is not the same as a bank robber re-paying the money he steals; plus, there seems to be far more evidence of LLs escaping the 3x penalty by late protection or repayment, than of LLs being stung for it (if they have complied late or repaid).

awt19
06-07-2009, 18:33 PM
In theory OP's tenant could bring a case against him, but I agree with jta that this is not the same as a bank robber re-paying the money he steals; plus, there seems to be far more evidence of LLs escaping the 3x penalty by late protection or repayment, than of LLs being stung for it (if they have complied late or repaid).

Mindy (can I call you that?) I agree that its a badly drafted piece of work. I may have gone a bit far with the bank robber comment, but the point stands that a statutory requirement on behalf of the LL has not been met.

Late repayment and late protection are 2 very different things. LL's can get out of the sanction if they protect the deposit before court hearing because if he does so, the grounds that the tenant can apply for the sanction no longer exist.

214(2) basically says the sanctions apply if the court is satisfied the deposit hasnt been protected. So by protecting the deposit (even as late as the day before court), the LL satisfies the court that the deposit is protected and that the sanctions dont apply.

Returning the deposit does not have the same affect on 214(2) as protecting the deposit as the grounds for the sanctions still apply.

So 214(3)&(4) still apply if the money was returned, but not if the money was protected.

I agree this could be interpreted different ways, but by my thinking, this is the most logical way of interpreting it.

Mars Mug
06-07-2009, 18:51 PM
214(2) basically says the sanctions apply if the court is satisfied the deposit hasnt been protected. So by protecting the deposit (even as late as the day before court), the LL satisfies the court that the deposit is protected and that the sanctions dont apply.

Returning the deposit does not have the same affect on 214(2) as protecting the deposit as the grounds for the sanctions still apply.

Since it’s not possible to protect the deposit after the tenancy has ended and the deposit has been returned, I don’t see a great deal of difference between those two paragraphs.

mind the gap
06-07-2009, 18:55 PM
Mindy (can I call you that?)

I would really rather you did not! mtg is fine

I understand your reasoning, but what is more significant (given the built-in illogicality of some aspects of this legislation), is what is actually happening in the courts.

It would be really useful if someone could keep a tally* of the results of all the cases of 3x penalty claims for deposit non-protection which are brought to court and tell us what the percentages are. I have been going on the anecdotal evidence reported on this forum, which suggests overwhelmingly that LLs can escape the penalty if they either repay, or protect late.

*Perhaps someone has, already?

awt19
06-07-2009, 19:07 PM
I would really rather you did not! mtg is fine

I understand your reasoning, but what is more significant (given the built-in illogicality of some aspects of this legislation), is what is actually happening in the courts.

It would be really useful if someone could keep a tally* of the results of all the cases of 3x penalty for deposit non-protection which are brought to court and tell us what the percentages are. I have been going on the anecdotal evidence reported on this forum, which suggests overwhelmingly that LLs can escape the penalty if they either repay, or protect late.

*Perhaps someone has, already?

Agree what happens on the ground is whats actually important. I'm pretty sure I have read a heap of cases where late protection has saved the LL. However, I'm not sure of any where the repayment has saved the LL. Can you point to any?

And agree...... we need a list of cases, specifics and outcomes...

Mars Mug
06-07-2009, 19:47 PM
There was one reported not so long ago, but searching for it is a tad difficult.

awt19
06-07-2009, 20:15 PM
Since it’s not possible to protect the deposit after the tenancy has ended and the deposit has been returned, I don’t see a great deal of difference between those two paragraphs.

The court will ask, has the LL protected the deposit? If yes? Then no penalty, if no then penalty.

Where is it tricky?

If the sanctions dont apply when the deposit was protected, or when the deposit wasnt protected, then they never apply, so why actually have them?

mind the gap
06-07-2009, 20:36 PM
The court will ask, has the LL protected the deposit? If yes? Then no penalty, if no then penalty.

Where is it tricky?

If the sanctions dont apply when the deposit was protected, or when the deposit wasnt protected, then they never apply, so why actually have them?

I think it is important not to lose sight of the pragmatic purpose of the legislation here, as I have explained before. To focus purely on the letter rather than the spirit of the law seems unproductive, especially since the letter is so badly drafted.

Mars Mug
06-07-2009, 21:06 PM
AWT19, try this thread, you posted in it remember? The judge's reasons are given in the first post, that same reasoning would apply in this case I believe;

http://www.landlordzone.co.uk/forums/showthread.php?t=18968

nata1ie
06-07-2009, 21:49 PM
I have been asked by another member to post my experience here.

I took my LA to court and got 3 times the value of the deposit. He had already given me back the deposit and I was no longer the tenant.

May 07 took out tenancy, In tenancy agreement it stated that the LA was acting as and on behalf of LL. Also stated deposit was protected by DPA

Aug 08 received notice to leave property

Nov 08 vacated property, agreed 2 minor repairs and LA told me deposit would be in my account following week

15 Dec 08 Still no deposit from LA, although being promised it on a daily basis.

Finally rang DPS to find out what the hold up was, and was told that the account was opened but never finalised and so cancelled. Told LA I knew he hadnt protected my deposit and was taking legal action.

Started legal proceedings through Moneyclaimonline.

16 Dec 08 received deposit

17 Dec 08 legal papers served on LA

06 Jan 09 received default judgement because LA hadnt acknowledged claim

22 Feb 09 LA applied for leave to appeal judgement

10 May 09 hearing for application for judgement to be set aside

In the mean time, I had contacted DPS and got all the details and timeline of what had happened with my account.

On 15th July 2008 LA had opened the account (funnily enough the same date as the Section 21 notice he served on me) He didnt complete application and so a month later they closed the account.

He hired a barrister from Arden Chambers to defend him, but the poor woman didnt stand a chance really when she saw the emails I had from the DPS.

The judge considered the case to be very simple, regardless of the fact that the LA had returned the deposit when he knew he had been found out, he had broken the law, he had failed to protect the deposit when he knew he should have done. His defence was that it was an admin error, which was answered by the judge that he, undoubtedly charged an administration fee when I took out the tenancy and so therefore it was his problem not mine.

Preston
06-07-2009, 23:11 PM
You were right to post your example, very interesting. Which court and when was this decided? Has it been written up anywhere that you know about?

nata1ie
06-07-2009, 23:24 PM
I dont know if it was written up anywhere.

Reeves v Martin & Co [2009] Swindon County Court.

Mars Mug
07-07-2009, 06:12 AM
Nata1ie, in your case it seems like the LA was being deliberately deceptive, only approaching the TDS so that they could issue the Section 21, and then being difficult with returning the deposit after you left. In the case of the OP in this thread he doesn’t seem to be deceptive.

I know the old saying about ignorance and the law, but it seems to me that where a judge assesses the situation in these cases, the whole picture will influence their decision, and the outcome for what seems to be basically similar situations can go either way.

nata1ie
07-07-2009, 06:39 AM
Oh he was, the fact that he had been lying to his solicitor meant that his barrister (that he probably spent more money on than the value of the claim) was completely wrong-footed when I showed her the emails from the DPS.

I would like to ask though, why the OH hadnt protected the deposit? Surely being a LL and being aware of the law, it would be something you made 100% sure was done correctly.

I chose to continue with the case, even after my LA returned my deposit, because he and his staff tried to treat me as though I was stupid. (Oh the law didnt come in until September 07 so your tenancy didnt apply) was just one of the lines they came out with.

He seemed to think that because he was a franchise of a large company he was above the law and that it didnt apply to him.

I have to say that I do not feel sorry for LL and LA if they do not protect the deposits.

If the taxman came after you and fined you because you didnt get your sef-assessment forms in on time, it wouldnt be viewed that he was being vindictive, you would just kick yourself up the backside for being so disorganized, well imo this is exactly the same, if you are a LL and letting a property, then regardless of whether you own 1 or 100, it should be viewed as a business and as such you should ensure that all necessary paperwork is done and up to date.

If a LL can forget to protect a deposit, who's to say he/she hasnt forgotten to get all the gas appliance checks done too and is about to end up with a dead tenant from carbon monoxide poisoning.

Mars Mug
07-07-2009, 06:58 AM
I would like to ask though, why the OH hadnt protected the deposit? Surely being a LL and being aware of the law, it would be something you made 100% sure was done correctly.

There are good landlords, and there are totally rubbish landlords, and every shade of lord in between. Some people just make silly mistakes, and sometimes pay the price.


I have to say that I do not feel sorry for LL and LA if they do not protect the deposits.

Neither do I. Having said that I have not protected my tenant’s deposit (but she hasn’t paid it either), was only £1 ;)


if you are a LL and letting a property, then regardless of whether you own 1 or 100, it should be viewed as a business and as such you should ensure that all necessary paperwork is done and up to date.

I agree, and some landlords need to remember that;

A) It’s a business, run it like one, professionally,
B) Landlord does not make you a Lord,
C) Tenants are your customer, they pay you, you are not doing them a great favour,
D) Tenants are not a lower form of life,
E) Some tenants are money grabbing schemers,
F) Some landlords are money grabbing schemers

Ericthelobster
07-07-2009, 09:08 AM
I have not protected my tenant’s deposit (but she hasn’t paid it either), was only £1What's the purpose of a £1 deposit, out of interest?

Mars Mug
07-07-2009, 09:27 AM
What's the purpose of a £1 deposit, out of interest?

The solicitor decided on it when drawing up the tenancy agreement, a nominal fee for some reason, I really don’t know if it makes any difference? The tenant is my sister-in-law who could no longer afford the mortgage, no deposit or guarantor was required (I would have been the guarantor in different circumstances).

jeffrey
07-07-2009, 10:55 AM
What's the purpose of a £1 deposit, out of interest?


The solicitor decided on it when drawing up the tenancy agreement, a nominal fee for some reason, I really don’t know if it makes any difference? The tenant is my sister-in-law who could no longer afford the mortgage, no deposit or guarantor was required (I would have been the guarantor in different circumstances).
Perhaps it was a nominal deposit as contractual consideration, prior to a binding AST?

Mars Mug
07-07-2009, 11:25 AM
That may well have been the case. I paid the solicitor to draw up the AST because there was a far greater chance of him getting it right than me. He did explain everything but rather than drag out meetings for several hours each sometimes I just nodded one way or the other depending on the tone of what I was hearing.

dawnie1972
07-07-2009, 11:54 AM
I recently moved out of a property where despite advising my landlord a number of times about the DPS he failed to protect my deposit. Prior to leaving i spoke to a solicitor who advised me NOT to persue the claim until after i'd moved out then he would not be able to protect my deposit at the last minute. the LL knew full well he had to protect my deposit but chose not to, as he has also done with the new tenant because they "do not want the government knowing what money they have". After thinking long and hard i decided not to persue the claim in court due to the stories i'd heard of judges throwing the case out due to me having received my full deposit back - i'd like ot have taught him a lesson tho!