From March 2011 to July 2013, I rented my property at 83 Oak Hill, Woodford Green, IG8 9PG to tenant Yeun Yong.
As of 9 March 2013, the monthly rent was increased from £1750 to £1900, and the deposit from £1750 to £3800 based on an Amendment Agreement signed by by the Tenant and myself as Landlord. The Amendment Agreement determined the deposit to be held by myself. However, as an oversees Landlord, I was not aware of my obligation to protect the deposit under a tenancy deposit scheme.
Subsequently, the Tenant failed to pay rent for the final month 9 June to 8 July. Also, during the inspection of the property, we found several items missing or damaged beyond normal wear ad tear. I assessed the damages and rent arrears to exceed the amount of the deposit and refused to return the deposit on these grounds.
However, in August, the Tenant claimed the refund of the full deposit of £3800, on the grounds that I had failed to protect it under a tenancy deposit scheme. I failed a counterclaim for the unpaid rent and compensation of missing/damaged items.
The hearing took place at Bow County Court (the Court) on 16 December 2013. The court established that:
- I failed to protect the deposit as required by the Housing Act 2004
- the Tenant failed to pay the rent for the final month for £1900
- the damages for missing and damaged inventory amount to £1774 (heavily discounted from replacement value due to the age of the items).
On 27 December 2013, I received a court order dated 16 December 2013, with the order to:
- for me to return the deposit £1900 (I assume this representing the net sum of £3800 deposit minus £1900 unpaid rent?)
- obligation to pay a penalty in the amount of 3 times the deposit, i.e. £5700
The court had, however, agreed to deduct the £1774 damages to the inventory caused by Tenant.
The court dismissed my counterclaim (in spite of having accepted the rent arrears and damages to inventory!) and required me to pay the court fees paid by the Tenant in the amount of £465, increasing the total amount payable by me to £6291.
1) If the court established that I owe the Tenant £126 (£3800-£1900-£1774), is it then right that the penalty is applied on the gross deposit rather than the net deposit of £126?
2) Given that the Court ruled in my favour for unpaid rent and damages, how can the Court dismiss my counterclaim and order me to compensate for the legal fees and expenses of the Claimant?
3) Is it right for the Court to apply heavy discounts on the valuation of the inventory (individual items were reduced between 50-100%), rather than replacement value these itmes (which is nearly £4000)?
4) Does the Court have the right to rule way beyond the actual claim of £3800?
5) The Court has refused my application for permission to appeal and stated that I can only appeal if permitted by the Circuit Judge at Central London County Court. Do I have a realistic chance of getting such permission and improve on the ruling?
The judge seemed to be completely unaware of the documents sent to Court by either myself or the Claimant, so that we had to bring our own copies to the judge during the hearing. I handed over my own copy of the Response Pack / Counterclaim to the judge, including the description and photos of the damaged and missing inventory, etc. This document was never returned to me.
In my view, the order against me is out of proportion compared to my failure to put the deposit in a secured scheme. I had moved abroad before the Housing Act 2044 came to force and was unaware of my obligation to secure the deposit. Issuing an order well outside the original claim creates a perverse incentive for tenants to NOT have their deposits secured under relevant tenancy deposit schemes, to be able to claim for penalties as a multiplier of their original deposits. By the virtue of the Amendment to the Tenancy Agreement dated 6 March 2013, the Claimant was well aware of the deposit not being held in the Tenancy deposit scheme and used this to gain a financial benefit in spite of agreeing to it in writing on 6 March 2013.
Thanking you in advance for your kind advice.
Postal address: 83 Oak Hill, Woodford Green, Essex IG8 9PG
E-mail: [email protected]