Hello, I am seeking advice on what I should do now do. I have made a gross over sight and completely forgot to place my tenants deposit into a scheme. Their tenancy started on 2nd August 2011,last year and I took a deposit. I read on this site that new legislation was introduced in April 2012 regarding deposits and now I'm panicking!! Does this mean it is to late to put the money in a deposit scheme and would I be liable to pay the tenant 3x the amount? What do I need to do to correct the situation? Your advice would be gratefully received.
[This reply assumes that you let on an Assured Shorthold Tenancy (England & Wales)] The law about Deposit Protection is in the Housing Act 2004. It was changed by s.184 of the Localism Act 2011, in force as from 6 April 2012. Here's a link: http://www.legislation.gov.uk/ukpga/2011/20/section/184 You can protect it now, albeit a bit late, so get it done AT ONCE. As long as you do so, and if T does not take action, you're OK. And the civil penalty- not a fine- is no longer 3x deposit; instead, it's anything from 1x to 3x (inclusive) as decided by the Court in T's proceedings.
I am a tenant, and a new member here. This is my first posting. Before today, I knew nothing about this area of the law. Please pardon me for jumping in. Jeffrey's correct reply to Jack became, to my knowledge, relevant to my interests only today. I hope Jack gets away with his oops-moment lapse, assuming that he's a nice man, not filthy rich, and his tenant is either undeserving, or not needy enough to need to claim every windfall that comes the way of a barrack room lawyer skilled in the art of litigation without a solicitor, just to live. I do find interesting the concept of a legal obligation, enacted by New Labour, for which the disincentive isn't a possible fine under criminal law, but a civil penalty ("x3") that a tenant would only be likely to extract if he planned to move anyway. Get the tenants to police the law themselves. Very clever! I phoned my ex-letting agent today, almost three months after I moved, to chase (yet again) my non-returned tenancy deposit, only to be told that I wasn't getting a penny back, because of delapidations for which I am being blamed, namely one broken socket (probably broken by the letting agency's workman when replacing the non-working block storage heaters), and (the lion's share) the black mould on the inside of an external wall that I could scrub and repaint in an hour. The agent had not written to explain this, and I don't see how the penetrating damp problem, which I happen to know that the previous tenant also had, is my fault. Actually, the agent has changed its story several times, as to why the money isn't back in my bank account yet. So, this is war, and I'm now out for whatever I can get, whether or not the landlord class think it's fair. In the process of chasing my unaccounted-for deposit, simply pocketed without a word, I discovered today that after the first six months of my tenancy, the letting agency took my deposit out of the approved scheme it put it into within the required 14 days, and never put it into another approved scheme. The background: At four months, the letting agency (a very big firm) had served notice to quit at six months, but had offered, for an unnecessary administration fee of between £30 and £40, to start a "new" tenancy with me, giving me the choice of another six months, and then another fee, or the rolling tenancy that the first tenancy would automatically have turned into anyway if no notice to quit had been served. According to my neighbours, it seems that they always pull this particular fast one. I paid the fee without protest, and chose the latter option, and got on with my life. So, for the remaining eight months that I lived in the property, the letting agency, without telling me, as I learnt today, held my tenancy deposit, but not registered with any approved scheme. I doubt the landlord, with whom I have never communicated directly, knew anything of this. I expect she's just a kind-hearted, rich old lady in London, who is worried about the possibility of dying less rich, and therefore invests her life savings in bricks and mortar, to give poor people somewhere nice to live. (I might be on benefits now, but before my health failed, I was a landlord too. I can see both sides.) There are several interesting legal points about my potential claim under section 214(3)(a) and section 214(4) of the Housing Act 2004, a claim that I think cannot fail, because sections 214(1)(b) and 214(2)(a) both clearly apply. I have numbered these interesting legal points. (1) Did I have a new tenancy at all? (2) If I had a new tenancy after the initial six months, was it a shorthold tenancy? (I agreed to pay the fee by email.) (3) It appears that I have to join the apparently innocent landlord as a co-defendant with the letting agency, because section 214(3)(a) is against the person who appears to be holding the deposit, who in this case is the letting agent, whereas the "x3" 214(4) remedy is expressly against "the landlord". But I have no quarrel with the landlord, and don't want to spoil their day by serving a county court claim. It has been the delinquent letting agent who has "dissed" me so badly, from whom I don't therefore mind winning a windful "x3" civil penalty, if I can. (All's fair in love and war.) As Jeffrey told Paul accurately (I have found out today), section 184 of the Localism Act 2011, which amends section 214 of the Housing Act, indeed wasn't implemented until 6th April 2102. This was about half way through my final month in the property. My section 214 cause of action accrued the previous September, when the letting agent had failed to register my deposit with a different approved scheme within 14 days, having terminated the registration with the first scheme at the end of the first six months of residence in the property - the first scheme in respect of which the letting agent emailed me today the certificate confirming the withdrawal of my deposit from the scheme eight months before I move home, i.e. almost eleven months ago. One of the relevant effects of section 184 appear to be making it explicit that the remedies I would be seeking, are available to ex-tenants, such as those who (as in my case) only learn about the breaches of section 213 of the Housing Act after moving to their new homes, asking for their deposits back, being given the run-around for months, and, upon deciding, in desperation, to seek adjudication from the administrators of the approved scheme, discovering that their deposits were taken out of that approved scheme six months after they moved into the property, eight months before they moved out of the property (in my case). The other effects of section 184 appear (as Jeffrey told poor Jack) to be (a) reducing "x3" to merely at least x1, and maybe as much as x3, and (b) giving the court discretion to order the apparent deposit holder merely to return some lesser amount than the full deposit, or nothing at all. That makes it rather important to me to know whether this recent change in the law will affect my own claim. (4) Is my claim to be under section 214 as that since-amended section still was when my claim first accrued, or is it to be under section 214 when I issue the county court claim, now that section 183 that amends section 214 has been implemented; or do I have a choice? Could I even pick and choose, so that the law at the time of the issue of my claim determined my eligibility as a mere ex-tenant, whereas the law at the time the claim accrued determined the quantum? (This would be ideal.) (5) Were the amendments, extending the remedies that now I seek myself to ex-tenants, enacted because those remedies had been held to be unavailable to ex-tenants? Any thoughts, anybody? John
Way too complex for a full answer here, I regret, but I can make a few points: 1. Did I have a new tenancy at all? If I had a new tenancy after the initial six months, was it a shorthold tenancy? Yes, you did. If T pays rent and L accepts rent, there's a letting. In most cases, it's an AST for its fixed term and any SPT thereafter. 2. If a protectable deposit is not protected, however, L cannot use s.21 rights. 3. Once the letting has ended, it's now too late for L to protect a deposit- 2011 Act says so. 4. giving the court discretion to order the apparent deposit holder merely to return some lesser amount than the full deposit, or nothing at all.: No, the deposit is returnable in full, unless protected. It's the civil penalty which is no longer set in stone.
