Dilemma on arrears, eviction, and late deposit protection?

Hi Judith,

On the deposit front please see below information from Paul Shamplina's article on the Deregulation Act >> https://www.property118.com/what-does-the-deregulation-act-2015-mean-for-landlords/

I would also recommend you cantact him with regards to the eviction as I can't see this going smoothly some how >> https://www.property118.com/evicting-tenants/

Doing it yourself can be a very false economy.

"Deregulation Act 2015 tenancy deposits

The requirement to protect a tenancy deposit taken for an assured shorthold tenancy in England and Wales was introduced on 6 April 2007, following its inclusion in the Housing Act 2004.

Deposit protection legislation was introduced because the government recognised many deposits were being unfairly withheld at the end of a tenancy. So the aim behind the Tenancy Deposit Protection is to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy.

The legislation covers virtually all new assured shorthold tenancy contracts used by letting agents and landlords to let a property in England and Wales.

Since the Tenancy Deposit Scheme (TDS) legislation came into force, there have been a number of cases before the courts in which the wording of the legislation has been under scrutiny. These cases include Superstrike Ltd v Rodrigues and Charalambous v Maureen Rosairie Ng.

But overall the Deregulation Act 2015 has provided much needed clarification on the steps that a landlord must take to comply with TDS legislation.
Deposits taken before 6th April 2007 and tenancies that became periodic before April 2007

Deposits don’t need to be protected if a tenancy deposit was received for a fixed term tenancy before 6th April, or if the landlord holds the deposit against a statutory periodic tenancy, which also started before April 2007.

However, if a landlord wishes to gain possession of the property under Section 21 of the Housing Act 1988, the deposit must be protected and the Prescribed Information issued to the tenant prior to serving the Section 21 notice.

Landlords will not face any financial penalties for non-protection of the deposit.
Deposits taken before 6th April 2007 and tenancies that became periodic after April 2007

Deposits taken before 6 April 2007, for tenancies that are still running and have moved onto a periodic tenancy on or after this date, now need to be protected in a Tenancy Deposit Protection scheme. If a deposit remains unprotected, the landlord could potentially face a fine.
Deposits taken on or after 6 April 2007

Landlords who took a deposit on an assured shorthold tenancy (AST) after 6th April 2007 and correctly protected and served the Prescribed Information to their tenant do not need to reissue the Prescribed Information to the tenant on future renewals of the AST, or if the AST rolls into a statutory periodic tenancy.

This is so long as the tenancy details haven’t changed (i.e. landlord, tenant and property information) and the deposit remains in the same tenancy deposit protection scheme.

Prescribed Information can include details of a person representing the landlord. The act confirms that where an agent has protected the deposit on behalf of the landlord, the agent’s contact details may be provided in place of the landlord’s."

It does not matter if the deposit is not regulated properly if you use Section 8. Always use section 8 if the tenant is over 2 months behind and/or does not pay in line with the contract. It is also quicker, but you or your lawyer will need to appear in court for ten mins.

Sorry to say James that it is not correct that if the deposit is not protected correctly, it does not matter if the possession is using a section 8 notice. Unfortunately, the tenant (who if on legal aid could have a barrister or solicitor representing him) could argue that the deposit was not protected correctly in which case, the Landlord would owe the tenant up to 3 times the deposit and therefore, the tenant would not be more than two months in arrears. I like you James, felt safe in applying for possession using a section 8 notice which led to the case being a litigation case which cost me very dearly although, most of it was due to my solicitor being negligent.
I argued the point that the deposit protection should be a separate case all together however, this did not appear to make any difference to the judge and in speaking to counsel who is assisting me on a case presently, it appears that deposit protection arises regularly in section 8 possession cases.
Please see my comment made two days ago in relation to the article “Possession Claim Online experience?”
https://www.property118.com/possession-claim-online-experience/#comment-102515
I consider myself to be a very experienced landlord and have carried out numerous possessions using Section 8 and Section 21 notices in the past however, it seems everyone is out to get landlords at present, and in this respect, I would follow Neil Patterson’s advice and do it professionally. I would fully agree with his comment “Doing it yourself can be a very false economy”.
From what Judith has written, I cannot see this being straight forward and would advise her to get professional help otherwise if she gets it wrong, and it ends up being a litigation case, she could easily be looking at costs of £10,000 and above if the tenant is on legal aid.
I always make a money claim online if I am not using a section 8 possession to ensure that the tenant gets a CCJ before leaving even, if I know it is unlikely that I would get my money back in order to prevent the tenant from being easily housed
It is sometimes easier to pay the tenant to leave whilst giving the tenant the impression that you are helping them. Unfortunately, we live in an unfair world.
With regards to the money claim I would have requested judgment so that the tenant gets two CCJs rather than just the one however, this is just my opinion and I am not an expert.

Thank you for that clarification Clint. I do not have your level of experience in this matter as although I have been a landlord for more than thirty years and have/run 25 properties, I have not taken a single deposit since the 2007 legislation. I refuse to give away my ability to use section 21 or section 8 notices(it seems).
In this case I would offer the tenant her deposit back so that she has the ability to get a new tenancy, have her sign to say it has been received and then use section 8 if she has not vacated by the agreed time.

Reply to the comment left by James Mann at 15/06/2018 - 17:01
With 30 years as a landlord you have been far longer a landlord than me. I started renting in 1996 & was immediately hit by the HMO licensing as Croydon borough was one of the first ones to enforce this.
I guess you will not have had the problems associated with deposits whilst evicting which is a real bonus in the current climate.
I was going to suggest to Judith returning the deposit so that the tenant could find a place to rent.

From the information provided it appears that
1) the deposit was correctly protected for the current tenancy (put in the custodial scheme before latest tenancy started and stayed there) [assuming that prescribed information has been correctly issued also], so no need to return it before S21;
2) Failure to protect the deposit last occurred more than 6 years ago, so the tenant is out of time to bring a claim;
3) S8 G8 should succeed (unless there is some other counter-claim the tenant can bring).

Having served s21 1(b) and 21 4(a)

I don't understand this. Have you served two S21 notices?

You should always issue a notice under "Section 21" of the Act; do not restrict your options in court.

with an expiry for the 17th June

Note that for a notice under S21(4) you have to seek possession AFTER the last day of a rental period; under S21(1) it can be after any day, and you can use S21(1) in a statutory periodic tenancy.

Thank you for your comments. Really helpful.

Michael, the Prescribed Information was given as per the DPS's own form with all the information inserted when the last AST was signed.
I didn't realise that the statute of limitations could be used.... hopefully that's good news. Also too that the deposit was already on protection when the last AST was signed. So within can be before as well as after signing.
The reason I served both s21's was that not having a signed AST since 17.12.14 the tenant is on a second statutory periodic. Was advised to do this by a solicitor.

I have asked a couple of solicitors for advice and each comes up with something different. Clint any particular Croydon solicitors you would use?

The tenant is not communicating with me. Even refuses to allow me to inspect the property or measure up for replacement coving. She has caused a lot of damage through excess condensation as he refuses to ventilate the property or use the dehumidifier I purchased to help alleviate the problem. I put in passive vents and she reported me to environmental health for causing a draught. I actually begged them to visit so they could advise me what I could do, which they did and just reported that it was the tenant's lifestyle, lack of her opening windows and not adequately heating the property.

Don't think I'd could get any paperwork signed if I did try and return the deposit.

When I went to serve the s21's last April she hadn't seen me as I was bending down to get the paperwork after knocking on the door. As soon as she saw me she slammed the door in my face. If I had been 2" nearer the door I would have had a broken nose! Might have been able to add ABH to the CCJ's though lol.

I will apply for money claim judgment on Tuesday.

I am using a counsel that is not based in Croydon. As your property is based in Croydon, it is more than likely a hearing would be at Croydon County Court where the chances are that your tenant would be represented by one of the legal advisers on the day if she attends. The important thing with the deposit if all served correctly is that, you have evidence that it was served on the day it was served. A further problem that may arise, is that the advisers may try to have a legal case which could end up being a litigation case by stating that the prescribed information has not complied with “Paragraph 2(1)(g)(vi) of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (this has never been tested in the high court). If this has not arisen, it is highly likely, that the legal adviser will say that there has been disrepair which has not been attended to and this could lead up to another hearing where the defendants will have to provide a defence and you may have to provide some additional documentation.

I would seriously suggest that if your tenant is on benefits and entitled to legal aid, you try and cut your losses by trying to agree with the tenant that she leaves the property by a certain date and you will write off her debts. This may or may not work as, if she is on benefits, she will need accommodation to go to, and Croydon Council will not offer her accommodation if she is not evicted with the bailiffs. You could also inform the tenant that if she has a debt against her, it is highly likely that Croydon Council will not offer her accommodation. I am suggesting writing off the debt as, if your tenant is on benefits, it is unlikely that you will get any of the money after she leaves.

I have written a lot and have assumed that your tenant is on benefits. If you are looking for a property solicitor to represent you at a hearing, I would say that you should be looking in the region of a £1000 and upwards to prepare the court documentation and attend the first hearing.

There is a lot more advice I could give you and explain many of the pitfalls however, it would be far too much to write. If you wish, I could discuss some options with you and you could contact me on 020 8407 2157 before 21st June.

I suggest that you definitely file for judgment on your money order as, if you attend court and have to pay the defendants legal costs, I believe you can set these costs against the judgment costs. If you do not have the judgment order, you will not be able to set the rent owed against the other party’s legal costs.

Please note that I am by no means a legal expert and what I have written should be treated as advice from a lay person.

Reply to the comment left by Judith Wordsworth at 15/06/2018 - 21:40The reason I served both s21's was that not having a signed AST since 17.12.14 the tenant is on a second statutory periodic. Was advised to do this by a solicitor.
I wouldn't use this solicitor; doesn't seem to know what he is doing.
I do not know what the effect of two S21 notices would be, but my guess is that you cannot use both in proceedings at the same time.
General advice (I realise it is too late now for you): Issue under S21 only and argue for anything in S21 that supports you (eg only argue 21(4) if 21(1) is rejected [but should not be if you raise the CoA ruling] and your notice complies with the rules for 21(4).