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Joshua
Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 24527
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hi I filed my tenants deposit late (I thought Id filed it,

Customer Question

Hi
I filed my tenants deposit late (I thought I'd filed it, but found out I hadn't so I hastily registered it 1 week before they were due to leave at the the end of the 1 year fixed contract). Now he is threatening to take me to court to try and get 3 times the deposit amount, despite the fact that I have agreed to give it back to him. Will he win?
Thanks for any advice
Submitted: 11 months ago.
Category: UK Property Law
Expert:  Joshua replied 11 months ago.

Joshua :

Thanks for your question. Please kindly RATE my answer when you are satisfied

Joshua :

When did the tenancy end please?

Customer:

It ended in June

Joshua :

This year?

Customer:

yes

Customer:

I just want to return his deposit, but I have been advised I should get something in writing to say that the matter is now considered settled. Otherwise, he has 6 years to file a claim to try and get 3 times the amount of his deposit out of me

Joshua :

Thanks.

Customer:

In my defence, I was undergoing 25 week psychiatric treatment at the time and plainly forgot. I registered my other tenants deposit however in September, as this was when I had finished my treatment and was getting better (I have two properties, one got registered on time and the other didn't)

Joshua :

Thanks. I very much regret that this is potentially going to cause you difficulty. Unfortunately the fact that the deposit was protected late does not comply with the legal requirements on you as landlord to protect the deposit. The law requires any money held from time to time as a deposit to be protected.

Joshua :

In terms of where this leaves you; the deposit regulations became all but unenforceable as a result of a series of court decisions however as a result the government took action under the Localism Act and now the regulations are very much enforceable and if a landlord fails to protect a deposit within 14 days of receipt, by installment or otherwise a court can order up to 3 times the amount of deposit in compensation.

Customer:

I appreciate that, but would the above be seen as extenuating circumstances? I was on very heavy medication and can prove this through my GP, also is this not just seen as betterment on his behalf. After all, his deposit did get protected and he is getting it all back.

Joshua :

Whilst the Localism Act unfortunately has placed landlord in a very vunerable position in this respect one minor cause for comfort is it has left if to judges to decide the amount nof compensation between one and three time.

Customer:

If I'm offering him it back, does that still allow him to claim.. and I gather it's 30 days now not 14. Either way, I know it's late. I assumed the spirit of this was due to landlords not registering the deposit at all and then not giving it back. Which is a very different case to mine

Joshua :

Judges tend to recognise opportunistic tenants and award them the minimum. Also if you can show extenuating circumstances this supports this further.

Joshua :

Are there any disrepair issues you wish to claim against the deposit for?

Customer:

There were, but I stupidly didn't take photos or do a check in. He has burnt a mirror and left stains on the carpet. But its his word against mine, so I fear I'm not in a good position here

Joshua :

Unfortunately not. The best approach is as follows:

Customer:

I am happy to just let him off of the damages (they came to £980), and return his £1600 deposit as I'm scared what might happen if he takes me to court for late registration. I am 3 months pregnant and my husband and i do not need the stress

Joshua :

You could consdier a letter to the tenant advising that there were a number of items of disrepair at the property (listing them) but as a gesture of good will in order to bring the matter to a close you enclose your cheque in the sum of £[the deposit] in full and final settlement of your liability to him.

Joshua :

If he banks the cheque and you use the "full and final settlement" words then he has no further claim against you.

Joshua :

You can further advise in the letter that if he wishes to pursue the matter in the county court he will expect you to counterclaim for disrepair issues.

Joshua :

In truth you will not be able to most likely due to the lack of an inventory but he will not necessarily known this. Enclosing a cheque can be effective because if he banks it then he has no further claim agianst you. Cash in hand as they say can be persuasive.

Customer:

How will I know if he's going to sit on it for ages or cash it.. the uncertainty is sending my stress levels sky high! I would rather get a conclusion somehow, as I've been told he has 6 years to sit on this and pull it out whenever he fancies making some extra cash ie he's in a better situation declining the cheque and going for gold?

Joshua :

Unfortunatly you don't. it depends upon 1) how greedy he is and 2) how wily he is and if he fully understands the full and final settlement wording implication. He does have 6 years to issue a claim but my experience is with such tenants is that will tend to bank a cheque quickly if they are greedy or in need of the cash or if they intend to push for compensation that they will respond rejecting the offer. There is no way to guarantee but the above are the most common scenarios.

Joshua :

Is there anything above I can clarify for you?

Customer:

Thanks, XXXXX XXXXX reading through it.. would you mind giving me five minutes please?

Joshua :

Of course. The thread will save to you account in any event so it will no be lost.

Joshua :

Please let me know if there is anything else I can help you with. In the meantime I hope the above is of some assistance?

Customer:

Thanks, XXXXX XXXXX have been very helpful. He has provided me with his bank account details in which to transfer the money. But is it too risky to transfer the deposit, with a covering email stating the full and final settlement stuff above? Would the onus be on him to rejsct the transaction should he not agree to final settlement terms or would I be covered by my email? He wont respond to calls or emails, so I cant even offer cash and I don't have an address for him either to post a cheque

Joshua :

Transferring money to an account is not as effective because there is no postive act on his part to demonstrate acceptance - i.e. banking the cheque.

Customer:

ah, right.. so what do I do from here. He's a wily student, who seems to know the law very well (or he's a good blagger) and is threatening to start court proceedings should I not transfer the deposit within 10 days time

Joshua :

All you can do in these circumstances is email / text him advising that you propose to consdier sending him a cheque (as you cannot transfer electronically - you can make up some throw away line as to why not like you do not have online banking or something of that order) for the deposit and ask him where it should be sent.

Joshua :

You can go on to say that you look forward to hearing from him and of course should he issue proceedings without responding that you will bring the email to the attention of the court with respect to costs.

Joshua :

Head your email "WITHOUT PREJUDICE SAVE AS TO COSTS"

Customer:

great idea, and then attach a note with the cheque saying in full and final settlement? And should I photograph it too, otherwise he can say I ddint attach the note to the cheque and he never saw the terms?

Joshua :

Note is note needed. Providing the letter states cheque enclosed in Full and final settlement... as above this is satisfactory. You do not need a further note attached to the cheque. Do keep a copy of the letter however.

Customer:

Ok, thanks .. and in the worst case scenario, say in 3 months the cheque has not been cashed and he starts proceedings to get 3 x the deposit amount from me, how likely is it that he will succeed in your opinion please?

Customer:

I'm broke!

Customer:

Also, considering the heavy medication (valium, anti deppresent and ant-psychotic) and NHS psychotherapy that I was undergoing back then?

Joshua :

He is likely to win I regret under the provisions of the Localism Act - the government have sought to put in place an effective punishment for landlords who innocently or not fail to protect deposits - but it would be my hope that if you can demonstrate that the failure was innocent and down to extenuating circumstances and that you offered to be reasonable and the tenant is exploiting rights opportunisitcally that a judge would limit the compensation to the minimum - namely one times compensation

Customer:

so -he gets the deposit back, and then another amount of deposit? Or just the original amount?

Joshua :

notwithstanding the above if he goes to court he can sue for the original deposit and up to three times the deposit on top in compensation - the amount being up to the discretion of the judge. The minimum compensation he is allowed to order is one times the amount in compensation on top of the deposit.

Customer:

oh, and I think he knows this. I do think thats what he will try to do. Is it at all possible that the judge will just rule that he takes his cheque and stops complaining?

Customer:

or is it pretty much guarentted that this man will stand to profit from taking me to court?

Customer:

Btw, thanks for all of this.. much appreciated!

Joshua :

Unfortunately the best the judge is allowed to do is award one times compensation if he finds the deposit was not protected. The Localism Act is quite restrictive. This was because the courts did pretty much exactly what you suggest with the previous legislation and the government got cross that the courts were effectively making the tenant protection toothless. So they legislated tough.

Joshua :

If he is not desperate for money and knows his rights he can profit here potentially. Your hope will be that he is not fully aware of what banking a cheque will do and that the temptation to do so will be too strong. It can often be the case but everyone is different

Joshua :

A pleasure. I hope you are successful in achieving a settlement as above./

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer:

Nope, I really appreciate all of your advice. Thanks again and good night.

Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 24527
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and 3 other UK Property Law Specialists are ready to help you

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