0:01 AM, 15th July 2024, About 5 months ago 10
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When a tenant vacates a rental property, it’s not uncommon for the landlord to discover damages or the need for repairs that exceed the amount of the security deposit held. This situation can be particularly challenging, as the deposit is intended to cover such costs. However, landlords do have options to recover additional expenses.
One effective method is through a small claims court application, specifically known as Money Claim Online (MCoL). This article explores the steps a landlord can take and the potential outcomes for both the landlord and tenant, emphasizing the importance of detailed check-in inventory reports and check-out inspections with dated photos.
Importance of Detailed Check-In Inventory and Check-Out Inspection
A thorough check-in inventory report and check-out inspection are critical for documenting the property’s condition at the start and end of a tenancy. These reports, ideally accompanied by dated photos, provide clear evidence of any damages or changes to the property, supporting the landlord’s claim if disputes arise.
Check-In Inventory Report: This should include a detailed list of the property’s contents and condition at the beginning of the tenancy, supported by high-quality, dated photos.
Check-Out Inspection: At the end of the tenancy, conduct a thorough inspection, documenting any changes or damages with detailed notes and dated photos. Compare these findings to the check-in report to clearly identify any tenant-caused damages.
Assessing the Damage and Costs
Before taking any legal action, it’s crucial for landlords to thoroughly document the damages and obtain detailed estimates or invoices for the necessary repairs. This documentation, alongside the check-in and check-out reports, serves as essential evidence in any potential court proceedings.
Communication with the Tenant
The first step should always be to communicate with the tenant. Provide a detailed breakdown of the damages and associated costs, along with the supporting evidence from the check-out inspection and the original check-in inventory. Request the balance owed. Often, tenants may be willing to settle the amount owed to avoid legal proceedings and the potential consequences that come with it.
Using Money Claim Online (MCoL)
If the tenant refuses to pay or disputes the claim, landlords can use the Money Claim Online (MCoL) service to pursue the debt. MCoL is an online service provided by the HM Courts & Tribunals Service in the UK, allowing individuals and businesses to claim money owed to them without the need for a lawyer.
Steps to File a Claim Using MCoL:
1.Register for an Account: Visit the MCoL website and register for an account.
Possible Outcomes
Tenant Pays: The tenant may decide to pay the amount owed upon receiving the claim.
Tenant Defends the Claim: The tenant may choose to dispute the claim, leading to a court hearing where both parties present their case.
No Response from Tenant: If the tenant does not respond within 14 days, the landlord can request a default judgment.
Consequences for the Tenant: County Court Judgment (CCJ)
If the court rules in favour of the landlord, a County Court Judgment (CCJ) will be issued against the tenant. A CCJ can have significant implications for the tenant, including:
Credit Rating Impact: A CCJ will negatively impact the tenant’s credit rating, making it difficult for them to obtain loans or credit in the future.
Enforcement Actions: If the tenant still fails to pay, the landlord can take further enforcement actions.
Enforcement Options: Attachment of Earnings
One effective enforcement action is applying for an Attachment of Earnings Order (AEO). This order allows the landlord to recover the debt directly from the tenant’s wages. The tenant’s employer will be instructed to deduct a specified amount from the tenant’s salary until the debt is paid in full.
Steps to Apply for an Attachment of Earnings:
Apply for an AEO: If the CCJ remains unpaid, the landlord can apply for an AEO through the court.
Court Review: The court will review the application and, if granted, send an order to the tenant’s employer.
Deductions from Salary: The employer will make regular deductions from the tenant’s wages and send them to the court, which will then forward the payments to the landlord.
If the tenant leaves their job, you can still have the attachment of earnings transferred to their benefit claim though this may be aa lesser amount as most deductions from benefits are limited to a max of 20% off the standard allowance which is currently £393.45 per month
While facing repair costs that exceed the security deposit can be daunting, landlords have a clear legal pathway to recover the additional expenses. By maintaining detailed check-in inventory reports and conducting thorough check-out inspections with dated photos, landlords can strengthen their claims. Utilising the Money Claim Online (MCoL) service and potentially securing an Attachment of Earnings Order ensures landlords are compensated for the damages incurred. It’s important to handle the process methodically, ensuring all communications and claims are well-documented to support a successful outcome.
RichDad
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Sign Up13:04 PM, 15th July 2024, About 5 months ago
Well done Julie, that's very helpful!
Further leverage from CCJs is that, depending on the former tenant's job/profession, it can badly affect their career path if they cannot have CCJs against their name.
I don't know if there is a single list of such non-CCJ jobs/professions ... but it might be a good selection criterion for future tenants.
Jim K
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Sign Up14:48 PM, 15th July 2024, About 5 months ago
Julie.
TVM.
A useful handrail. I think it may be worth mentioning that there are a series of letters which should/must be gone through. Min 2 'demands' for payment and a final letter before action -which needs to be in a prescribed format.
Also what to do if T has not left a forwarding address which is not uncommon. In this case letters are considered correctly served if sent to the last given address -usually the rental. Ensure you keep copies of postage which if sent from PO can be furnished with a receipt of addressee. However I understand that some Ts have successfully argued that they didn't get these letters -leading to a failure in the case.
Also from the combined and joint LL perspective. I believe its worth taking the time effort and cost to file these claims and get the judgements recorded. Only then will we get anything like a database of Ts who have not discharged their full responsibilities.
DPT
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Sign Up16:05 PM, 15th July 2024, About 5 months ago
Its also worth adding that if the landlord submits an MCOL claim for damage, they should not try to claim the deposit through the scheme's own claims process unless its for something unrelated. The courts don't like what are effectively two claims for the same issue. Instead, the landlord should ask the judge to award the deposit in part payment.
LordOf TheManor
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Sign Up20:35 PM, 15th July 2024, About 5 months ago
Of particular note:
If your ex-tenant is self-employed you have no chance at all of reclaiming anything!!
Reluctant Landlord
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Sign Up6:51 AM, 16th July 2024, About 5 months ago
the article is good - highlights the process...but...
there is more cost involved for the LL to chase this debt never mind the time and energy needed. It would have been good to see the individual costs against each stage too so this is understood (NB court costs just increased across the board).
None of this is a quick solution and at the end of the day even if you have ticked all the boxes, got the judgements etc, the debt may never be repaid.
You have to seriously determine if some debt is worth chasing from the start or you are just going to be throwing more money at it.
If tenants are on benefits the amount you can get back is capped, and if they have other debts, the amount you receive will be even less. There is a hierarchy of debts and deductions to be aware of.
https://data.parliament.uk/DepositedPapers/Files/DEP2023-0365/052_Deductions_priority_order_V7-0.pdf
GlanACC
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Sign Up8:01 AM, 18th July 2024, About 5 months ago
In short, if the tenants has no money you write it off. However ALWAYS use MCOL to give the tenants a CCJ. You don't need to try and reclaim the whole amount owing.. Just asking for £300 will only cosy you £35.00 costs.
PAUL BARTLETT
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Sign Up11:57 AM, 9th August 2024, About 4 months ago
Reply to the comment left by GlanACC at 18/07/2024 - 08:01
Fully agree that there must be Tenant accountability especially since the biased RRB law only introduces a LL register and not a T register.
How does the MCOL case or possible CCJ actually have effect?
Is that public data that can be found in the reference process?
I've heard that CCJs are visible to Credit Rating Agencies.
Is that MCOL/CCJ in Credit Rating data that can be found in the reference process?
GlanACC
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Sign Up14:34 PM, 9th August 2024, About 4 months ago
Reply to the comment left by PAUL BARTLETT at 09/08/2024 - 11:57
In used to work for a credit agency and having a CCJ does affect getting any kind of credit - loans, mortgages, mobile phones etc. It is visible to all mainstream lenders, estate agents etc that use credit reference agencies (and that is most of them) - so giving the tenant a CCJ will snooker them for the next 6 years.
TheMaluka
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Sign Up12:41 PM, 10th August 2024, About 4 months ago
Reply to the comment left by GlanACC at 09/08/2024 - 14:34
Giving a tenant a CCJ for part of a debt snookers them for six years. After another 5 and three-quarter years, give them another CCJ for the rest of the debt (Beware the statute of limitations). Snookers them for nearly 12 years.
Clara Skye
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Sign Up15:09 PM, 5th September 2024, About 3 months ago
To clarify, a landlord can apply for MCoL if the claim is for more than the deposit? If it's just the deposit amount the dispute has to go through the deposit scheme is that the key factor? It's just the warning that the website shows if you tick the box that the claim is related to a tenancy deposit is a bit unnerving. The CAB is trying to get my ex-tenant to go through the TDS, but I have been stung by the TDS with my last dispute for damages. I intend to use the MCoL route this time. I have sent a warning letter to the tenant outlining my intention to use MCoL, I'm updating this to include a summary of the claim as I've found that information on the pre-action protocol. I've previously sent the tenant emails containing the check-out report and updated this with photos and estimates, but I believe that a summary needs to be added to the warning letter. The TDS adviceline said that I could do ADR with them and stop it at any point before it goes to adjudication with the TDS. However, I don't want to get sucked into the TDS again because they totally messed up my last claim and it took months to get any level of compensation and an apology. It is better to go down the MCoL route from the start and engage with their ADR process instead? Any tips and guidance are welcome.