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F E Smith
F E Smith, Solicitor
Category: UK Law
Satisfied Customers: 8445
Experience:  30 years in General Practice
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I am looking for any potential defenses and counter claim

Customer Question

I am looking for any potential defenses and counter claim against non protection of deposit
JA: Are you in the UK or are you in the States?
Customer: UK
JA: What action has been taken so far? What's your ideal outcome?
Customer: tenant has moved out and had deposit returned less £350. Tenant has made application to court and wants the penalty invoked.
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 2 months ago.
Category: UK Law
Expert:  F E Smith replied 2 months ago.

Do you admit that you failed to protect the deposit?

Was there a reason for that?

Is the tenant using solicitors or doing it himself?

Customer: replied 2 months ago.
The tenancy was 6 months paid in advance. The deposit was not protected due to my disastrous personal life. I am a family law solicitor so I don't venue if that makes it worse or suggests deposit is safe.
I am not a professional landlord it was my homeThey sought to extend but only did for 3 months and moved out on 1 January so my loss on rent is 3 months. Plus the second Six months should have been increased by RpiThey have breached lease in other ways damage etcThey have solicitor who is seeking summary judgement and £1500 costs.we have not had papers we found out when they emailed their costs claim they have refused to send us a copy and told us to get from court
Hearing is on Monday
Expert:  F E Smith replied 2 months ago.

I’m afraid that your disastrous personal life has nothing whatsoever to do with a defence to failure to protect the deposit. You have a statutory duty to do so.

It also doesn’t matter whether you are a professional landlord with 100 properties or are just dabbling with just 1 property. There is a statutory requirement you to protect the deposit in a recognised scheme within one month. it is irrelevant howupstanding your own financial circumstances are.

The statutory provision under the Housing Act, is that if you failed to protect the deposit within the statutory period they are entitled to “up to” three times the deposit as compensation. That does not mean they will get three times the deposit it means, literally what it says, they will get “up to” three times the deposit.

It is not common for the courts to simply award three times the deposit as compensation because that would be a windfall for the tenant.

You are still entitled to counterclaim for any damage to property or any loss of rent if they left early plus any increase in rent which they did not pay, provided you asked for it.

The solicitor will be milking this for costs and the claim for costs is likely to be as much or potentially more than the claimant’s claim.

It is unlikely that the claimant will get some money judgement unless you have a defence. It is not unreasonable for them to send you a copy of any documentation they have sent to the court and indeed, they should have already sent you documentation. You can raise that in court as part of your defence to any costs claim they may be making.

Based upon what you have told me, you do not have a defence. It really is a case of mitigating the amount you are paying in respect of your statutory beach and making them an offer to keep this out of court.

Can I clarify anything else for you?

Please rate the service positive. It’s an important part of the process by which experts get paid.

We can still exchange emails.

Best wishes.


Customer: replied 2 months ago.
The lease is clear about the rent being paid upfront. Can I state that they only paid 3 months so the previous deposit was put against rent and I returned it to them when they moved out less £350 for check out fee. The deposit was £2100. They moved out without giving me s forwarding address and without telling me. I feel I was kind to them but my house was empty for 3 months. They also broke the oven without telling me and did not forward my post on within 7 days.They just piled up my post for 6 months. This is a small claim so how can the solicitor claim costs and why have they applied for summary judgement? Is their costs application only considered if they succeed on that
Can offer to settle be made before Monday as it is too late to vacate. we did ask them to adjourn as we had not received the papers
They state that they would have accepted any reasonable offer to settle
What is reasonable?
My offer was the £350 as l ignored the potential rent claim and at that time I did not know about the oven
If they are seeking a windfall based on a statutory duty then can l rely on the terms of the lease and claim outstanding rent even though they vacated? I did not deal with it because of my personal life.Thanks
Expert:  F E Smith replied 2 months ago.

Thank you. This is a statutory breach. You did not protect the deposit within the required period of time and hence, you have no defence. It’s as simple as that.

I’m afraid that the argument you mention which is that this was not deposit, it was advance of rent, will not usually work and in any event, you have admitted to me that it was a deposit and I cannot suggest that you lied. Even so, it’s unlikely to be accepted by the court.

You have a counterclaim (not a defence) for any damage they caused to the property and for any rent which they did not pay.

What you might want to do is come up with a calculation and evidence of the damage and unpaid rent and come to an arrangement to pay them something.

They are entitled to “up to” three times the deposit plus the return of the deposit. They will not necessarily get three times the deposit back. This is not Small Claims Court even though the amount claimed is under £10,000 and they will also get their solicitors costs.

I’m sorry to say that it’s unlikely you’re going to come out of this without having to pay some money. You need to make an offer to settle this to avoid getting to court otherwise the solicitors costs are going to add heavily to it.

Customer: replied 2 months ago.
What about the summary judgement application. I have not had the opportunity to put in a counterclaim which is £4000 rent plus about £500. I am concerned about protecting myself on costs
I thought most firms in this area took a percentage of the compensation so their costs are outside the market norm. Can I raise this as a costs argument?
They have not suffered any loss and are relying on the statutory duty but if their claim is reduced to one not three times the deposit then not sure what I should offer to settle.Their solicitors costs are inflated at £1500 but I think they have not even considered the rent aspect.If I make an offer of £500 to make it go away and on basis I have not seen their claim and point out the rent aspect will this prevent summary judgement?Thanks
Expert:  F E Smith replied 2 months ago.

They will only get summary judgement if you don’t have a defence or counterclaim. At present, you don’t have a defence. You have mitigation, in respect of your own personal circumstances, but you don’t have a defence. What you do have however is a counterclaim.That is enough to oppose the application for summary judgement.

You need to put in your acknowledgements and admission and counterclaim and with regard to the application for summary judgement, defend that on the basis that there is a substantial counterclaim

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