Unprotected deposit court proceedings?

Unprotected deposit court proceedings?

0:01 AM, 24th October 2024, About 2 months ago 26

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Hi all, apologies if this is not the way to do things. I’ve signed up specifically to this forum to see if anybody would be kind enough to offer some advice if possible?

I’m messaging as I feel I’m essentially being extorted by a tenant whom I believed to have had a brilliant relationship with only to be threatened with court action.

Long story short – I’ve had the tenant for 13 years in the property and never had a single issue in that time but decided to sell up this year. We gave the tenant significantly more notice that we planned to end the agreement due to the relationship and wanting to ensure she had plenty of time to sort herself out (and have even supported one of her family members with time and effort in getting a property separately following some personal trouble).

The problem as you can gather is that I hadn’t protected the deposit – I totally accept the mistake and take full ownership/accountability for this – it was purely a little bit of naivety and belief that given the long standing relationship that it wasn’t a huge deal (live and learn!), and despite there being significant damage to the property, far exceeding the amount held, I have offered her the full deposit back as I accept that I technically broke the law. There was never anytime where the deposit was withheld.

The tenant however has gone through a solicitor and has asked for x3 times the amount of her deposit and legal fees on top, citing ‘material loss’.

We are essentially questioning whether to go to court and push back on the basis that she’s taken advantage of this situation and hasn’t suffered any material loss to justify the requested amount – it’s a huge shock and represents moral bankruptcy in our eyes, but here we are!

There’s never been a crossed word or anything untoward in the days before the exchange… all very friendly, nor have any issues ever been raised on the condition of the property but as the handover day approached, she went radio silent for days and didn’t hand the keys back until days after the exchange was agreed.

Finally after multiple messages politely asking for the keys, she came back to say she was going through solicitors for money.

In anybody’s experience, under the circumstances do you foresee a judge demanding the full x3 amount paid, in which case it isn’t worth pushing and are better off just paying the amount?

It’s principally disgusting to us to pay all this money when we’ll essentially be paying somebody we’ve done a lot for to leave the place in a state. We’ve gone back to the solicitor to try and mediate and avoid court but it’s been met with increased fees and no interest in doing anything other than exploiting. It would be great to learn how judges deal with the circumstances in these cases and how it does or doesn’t play a part in the outcome?

Apologies for the mouthful but exceptionally grateful for any advice!

Best regards,

Will


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Rodney Davison

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10:03 AM, 24th October 2024, About 2 months ago

A common sense approach might be to total the costs of the repairs and deduct this from the 3 x deposit and try to agree a settlement directly with the solicitor somewhere in the middle.

K Anon

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10:08 AM, 24th October 2024, About 2 months ago

These are invariably taken on by no win no fee solicitors and they will do everything to bump up costs because it's iron clad win.
Offer tenant twice deposit value and try to exit. If it's that long ago then maybe rent deposit amount was less so give the 3x amount and get out.
I got hit, very genuine error, the council had imposed terms that contradicted deposit framework so was openly trying to resolve.
Long story short got hit 1.5x deposit, so about £1500 + NWNF solicitor costs of ... £8500 reduced to £7000. Absolute choker. It wasn't even her (benefit tenant) money, she didn't even pay the deposit but she was entitled to be compensated because that's the law.
Disgusting but my advice get out, suffer extra now and avoid stress, it's iron clad win for tenant.

susan sinclair

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10:08 AM, 24th October 2024, About 2 months ago

In my opinion - unless you have landlord insurance willing to pay for the dispute you will have to pay up. The judge won't care about how unfair it is and certainly won't be looking at how unreasonable the request is. They will simply follow the law. I have a friend whose father recently died. Similar. Done on a handshake many years ago. Great relationship. Tennant demanded much more and got it. Sorry.

Stephen Smith

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10:24 AM, 24th October 2024, About 2 months ago

Simply return the deposit, get a receipt.

Fraser Hopewell

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10:28 AM, 24th October 2024, About 2 months ago

I’m going through the same thing at the moment. I got solicitors involved and am probably going to court over it. There have been a few court cases but most don’t go to court as the no win no fee don’t usually cover attending court and also mine are not going to deal with the counterclaim I’ve put in. IMO register the deposit now (some judges have accepted this if it’s done before the hearing) . Then either see if you can do a deal with the tennant direct avoiding the solicitor as their fees will only increase every time you contact them and that’s how they make their money and explain to them they are only likely to get 1x the deposit at court less the damages cost so if you give them 2 x deposit its win win

DPT

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10:36 AM, 24th October 2024, About 2 months ago

This is a wake up call for you. You are still acting like an amateur landlord, being reasonable and hoping the relationship will allow you to muddle through instead of really understanding what you're doing. I'm sorry to say that there is no place for that approach in this sector any longer as the risks are too great. This is just one of a number of ways that the tenant or the Council can easily get money from you and why wouldn't they.

Deposit protection came in 20 years ago, there is no excuse. This is a strict liability offence. Don't go to court. You will lose and then have to pay the legal costs, which will make the 3x deposit look like small change.

I would strongly suggest that when this episode is over, you sell up.

Will

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11:11 AM, 24th October 2024, About 2 months ago

Thanks for all the responses - I understand I won’t win in court… nor do I intend to go in and not take accountability. My question is, based on the circumstances, how likely is the judge to rule that the tenant deserves x3 times the amount? My assumption is that would be imposed in scenarios where the landlord is being difficult and has impacted the tenant getting another property.

The demand is ridiculous from the solicitor despite efforts to negotiate - x3 the amount plus their costs. The only additional costs will be the court costs if the judge rules that should be paid by me.

Is it likely I’ll be paying more than what the tenant demands by going to court or is a judge likely to be fairer do you think?
Thanks again all!

Will

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11:17 AM, 24th October 2024, About 2 months ago

Sorry just to add - I paid the deposit back immediately (before any action was taken)

Freda Blogs

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11:17 AM, 24th October 2024, About 2 months ago

I’m sorry to hear of your predicament. Sadly all recent & pending legislation is punitive towards landlords and is ultimately killing off good landlord & tenant relationships and forcing us into an adversarial relationship and often out of the sector entirely. This doesn’t help landlords or tenants.

I wonder whether the tenant is being persuaded by others to proceed down the solicitor route and might respond to a personal approach - if they have a conscience? I hope you can settle amicably however unlikely it seems at present.

Good advice provided in the other posts if you have no other option. Good luck.

Graham Bowcock

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11:45 AM, 24th October 2024, About 2 months ago

The requirement to protect deposits is well known and has been with us for many years, so to be honest this is a problem of your own making. Okay, the tenant is not great, but had you done things properly your problem would be smaller.

I suggest you pay the full deposit back.

Subject to what your tenancy says, your claim againts the tenant still exists, even if there is no deposit to pay it from.

You should probably get an eviction specialist on board to steer you through the process of regaining possession effectively.

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