Deposit Protection Boo Boo – Landlord SOS – HELP!

Is there anything being done to protect the
Landlords re the deposit protection scheme. Since
my last tenants left I have spent around £2000 and
have things to to the house. They disputed their deposit being used to do the repairs and the deposit tribunal said it had to be returned to them despite them denying doing the damage and not reporting it when they took on the tenancy. I was warned by several big agents that the Disputes Agency almost without fail supports the tenant even when they are so obviously wrong. There must be something the Landlord can do to protect themselves?!

Sally Jones

Look guys see my previous post but it clearly says from when the deposit is paid not the tenancy created, if a tenant gives me a deposit 2 months before they move in I still have to send it off within 30 days I don't have a tenancy agreement in place there is no contract no house no nothing it's 30 days and that's it. I'm not a solicitor but I will have a blo*dy good go, I did business studies law I will have you know!!!

Hi Sally, there is a way for landlords to protect themselves, in fact there are quite a few. The starting place is a good inventory and plenty of date stamped photo or video evidence at the beginning and end of the tenancy. If the case of significant damage the deposit may not cover the cost. It is possible to insure against malicious damage. You can insist on tenants buying a contents insurance policy providing you leave them to choose an insurer. You can also have "malicious damage by tenants" added to your own landlords buildings and contents insurance.

IO and I have been having this debate for some time now because I hold the view that DC has expressed. It is a very interesting debate and could go either way in a Court of Law. I do respect the fact that IO has said that it is better to be safe than sorry and sending the information to the tenant again would certainly do no harm.

My belief that a tenancy which becomes a Statutory Periodic (SP) at the end of the fixed term does not need a new protection nor prescribed information sent to the tenant again is based on two things.
1. By its very nature a "statutory" Periodic can only come into being at the end of a fixed term otherwise it would be a Contractual Periodic. Statute says that this is an automatic result when a tenancy continues at the end of the fixed term. A landlord has no automatic right to Possession because the tenant continues to be the tenant, all the original terms and conditions continue to apply based on the contract entered into at the start of the fixed term. If the tenancy came to an end at the end of the fixed term a landlord would have the right to Possession. If a new tenancy was needed to enable the tenant to remain in the property the landlord would not need a court order to remove him. The end of the contract would be the end of the contract just as with any contract - as we know this is not the case.

2. Even if case law in future holds that a SP is in fact a new tenancy, as IO and others believe, as DC has said, the TDP legislation does not talk about new tenancies it referrs only to the date when a deposit is given to the landlord. The only way a landlord could extend the 30 day rule at that time would be to take/receipt the deposit as a retainer until the AST is signed but on the date that the AST is signed the property is no longer retained for him, because there is a contractual agreement between landlord and tenant, and this will start the 30 day clock ticking for the deposit protection. Note not the date when the tenancy begins because TDP legilsation does not talk about anything other than the giving and receiving of the money
When a SP begins the deposit would not usually be handled by landlord or tenant and the date on which is was received by the landlord would be the original date of receipt.The only time when a landlord would start the clock ticking again is if there was a divi-up at the end of the fixed term to take account of any losses or damages from the fixed term before the SP came into being. In this case the TD protection would begin from scratch otherwise TDP legislation is silent on "rollover" of a fixed term into a SP.

I am not legally qualified but I have read and re-read the legislation and this is my opinion which is shared by all but one of the Deposit Protection Scheme - although if memory serves even than one did a UTurn earlier in the year. I am sure that Mark A will post the link to that discussion.

Josie I am sorry that your original question has go off at a tangent but it is no wonder that landlords are confused about legislation when those of us who should know cannot agree (I have been a landlord for 41 years). I hope that you get your issue resolved painlessly.

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@Mary,
If what you are saying is correct among all the opinions regarding a SPT - and I personally agree with you - What about a renewal? We all seem to agree that a renewal is a new tenancy so what re the deposit. Generally with a renewal the deposit money would not be physically returned to the tenant and then collected again. (The mechanisms of the deposit schemes would not facilitate it but that's another story) so why is a re-protection and new PI needed and how is the 'old' deposit then associated with 'new' tenancy. What sort of clause would be needed in the new agreement to identify and facilitate it?

Ray

I will leave Mary to anser you but the big mistake here is to think physically and in terms of the money actually going somewhere.

What matters is the legal poisition. If the old tenancy comes to an end and a new one arises (periodic) or is created (renewal) then by definition that period of protection (legally) must end and a new one must be created. The fact that DPS still has the money or that the LL or agent does, are not the issues.

What is the issue is that the deposit must be protected, or re-protected and the PI issued because in TDP it is a two operations exercise.

I respect Mary's view on this and others who disagree. On my side are some far more learned brains than mine. As Mary says unless and until resolved in a Court of Record we'll just have to continue with our views and differences.

Point is do what I recommend even if a nuisance and eventually deemed unnecessary and no offence can have been committed because of overkill.

No tenancy clauses are needed just action under TDP requirements

@IO hahaha I knew you would not resist a comment.

@Ray there are two elements to TDP.

The first we have covered.- the need to protect the deposit and provide the tenant with the prescribed information within 30 days

The second is the requirment to meet the rules of your chosen deposit protection scheme. All schemes require a new protection when a new AST is put in place or where there has been a change or changes to the terms of the agreement.- apart from rent increases which do not need a new AST. It is the rules of the schemes that therefore start the clock ticking again not the legislation per se. It is very important that landlords check regularly with their scheme ans keep up to date with changes to the rules. One scheme changed their rules in January 2012 and this change said that a tenancy that went SP must have a new protection and in fact that at the end of the fixed term the deposit was no longer protected unless the landlord had renewed it. Landlords who are using that scheme and did not reportect the deposit and serve the paperwork on the tenant again would have broken the law and it seems that many of them were unaware of the change in their rules.

From April there will be 5 schemes from which to choose and landlords need to study the terms and conditions carefully before deciding which to use. There is no point is saving money on the initial protection if landlord have the cost and trouble to reprotect at the end of the fixed term when a SP begins.

I have stuck with MyDeposits, even when another scheme was half the price and I am very glad that I did because my tenants deposits have continued to be protected until I unprotect them and I have only paid one fee. The scheme now requires landlords to update the record to say that a SP has begun but that takes just two minutes. MyDeposits are reducing their fees by 50% from April 2013.

@Valerie I hear your frustration but TDP legislation was brought about by those landlords who did not treat their tenants fairly and often expected them to upgrade their properties at the end of the tenancy. The law requires us to accept fair wear and tear and it is up to us to keep good records to establish the difference between that and willfull damage.

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@IO
Ignoring for the moment the divided opinions on SPT's. The legislation and the scheme rules talk about protection within 30 days of receipt of the deposit. If you re-protect due a renewal (New tenancy) and use the deposit received say 20 days prior to the start of the initial tenancy, it is therefore impossible to protect the deposit within the 30 days of receipt (You need to advise the scheme when protecting the deposit the date on which the deposit was received) as it was at least 6 months prior. If you then try to argue that the 30 day period for the new tenancy begins on the start date of the new tenancy then why is this not the same at the start date of the initial tenancy? Might that be because the physical receipt was prior to that?

@ Mary,
I do realise that the rules of the various schemes differ and in fact I currently use both MyDeposits and DPS depending upon the circumstances.

My question still stands however. That is if we are in effect rolling over the original deposit when a new tenancy is created, how do we associate the 'old' deposit with the 'new' tenancy?

@Ray

If I may the deposit in effect is repaid and then re-collected. That physically isn't what happens, but the deposit ceases to be protected at the end of the initial tenancy and the LL or agent then has 30 days to protect it (and re-serve PI) from the date of commencement of the new tenancy.

Don't worry too much about technicalities here and the shy's and wherefores there is no doubt that on a renewal deposit protection must be repeated - both parts of it. That has never been in doubt right from April 2007

@IO
You say don't worry about the technicalities, but that's exactly what gets people into trouble - not understanding what they are doing.

I accept a renewal requires a new protection and I understand that there are two parts to that process. However, If the taking of the deposit is triggered by start date of the new tenancy rather than the physical movement of funds, why do you consider this to be different from the situation at the start of the original tenancy rather than the date of handover of deposit. Please answer this question with facts not just words which amount to 'that's how I think it is'. Sorry if I am being a bit dogmatic but you say its nothing to do with physically receiving the deposit but do not explain your contention and why this is not the same at the beginning of the initial tenancy.