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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 70292
Experience:  Over 5 years in practice
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I am a landlord with a property rented since May 2014. The

Customer Question

I am a landlord with a property rented since May 2014. The tenants would not give me the alternate personal details required for me to give them a deposit certificate (I am a member of MyDeposits) within 30 days, so I know that at the moment I cannot issue a section 21 notice to bring the tenancy to an end in May 2015. However, the tenants are now 1 month in rent arrears and tell me they have a cashflow problem for the next month. I have offered to use the deposit for the unpaid rent in January and return the balance of the deposit to them in cash, which they have agreed. If I do this, can the deposit be considered as null and void, ie. I no longer have a deposit, and can I then issue the section 21 notice which a court would consider as valid?
Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
No, in short. I am afraid you cannot use the deposit as rent to obviate the provisions of the Localism Act.
What you can do though is twofold. You can obviously protect the deposit. You are at risk of a claim for three times the sum but there is no realistic chance of that if the tenants refusal to supply information was the cause of this. The other alternative is to return the deposit to the tenants. If you can trust them then they can return it to you immediately as rent. If you cannot then they may keep it. You can, at least, though issue a S21 notice at that point.
You can always sue them for the outstanding rent. They will not want a CCJ because they will be unable to get credit for 6 years which most people want at some point.
Can I clarify anything for you?
Jo
Customer: replied 2 years ago.
Thank you very much Jo. However. I do not understand why I cannot reach agreement with the tenants to deduct the month's rent outstanding from the deposit with all of us signing a formal agreement to this effect and with me returning the balance of the deposit to them. I thought that the Localism Act, Section 184 (13) of the Localism Act 2011, permitted agreed deductions to be made from the deposit?
Is there some special provision barring arrears of rent being so deducted and, if so, could you let me know this provision?
Thank you very much
Expert:  Jo C. replied 2 years ago.
Yes, it does.
But that is not what you are doing here. What you are doing is trying to serve a S21 notice which you cannot do validly unless you have protected the deposit. The only way around that is to return the deposit.

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