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Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Summary: My parents rented a property 25 years ago. At the

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Summary: My parents rented a property 25 years ago. At the time they paid a deposit of £500 through a letting agent, however, as they were such good tenants the letting agent was cut out after about a year and they have had a private agreement on a rolling tenancy basis. Despite a new contract being signed 3 years ago, the landlord did not put the deposit into the required deposit scheme until 1 year ago when he employed the services of another letting agent with a view to selling the house. Now that the contract is expired, he has made no offer to reimburse them any interest on the £500 he has had benefit from for 25 years (24 years prior to placing it in the deposit scheme).Question:
1) Are my parents entitled to interest for the 24 years he has had the deposit prior to entering the scheme and if so, at what rate?
2) Can the landlord still be prosecuted and fined for not placing the deposit in the required scheme by the legal deadline, and if so, how much would he be fined?
Hello my name is ***** ***** I will help you with this.Did the contract say it was to be held in an interest bearing account please?
Customer: replied 1 year ago.
I will have to check. Please pause my questions for a couple of hours till I obtain the contracts and have them in my hand. Thank you for your patience.Nicola
Ok Nicola. I also need to know what type of tenancy agreement they had.
Customer: replied 1 year ago.
Well, I can answer that one. When they initially rented the property 25 years ago it was an assured shorthold tenancy agreement for 6 months which was renewed. Then the landlord was happy to cut out the agent. My parents are out at the moment but as soon as they come back I will shoot round and pick up the file containing every piece of correspondence so we can work on the facts.
Ok - need to know about the deposit whenever convenient. Alex
Customer: replied 1 year ago.
Hi, I now have all the correspondence to hand. I can confirm that the original agreement took place on the 2nd April 1993 and was an AST that ran for 6 months. It was then taken over by the landlord. The original tenancy agreement confirms receipt of the £500 bond and states that it should cover any damages, unpaid rent/bills etc. There is no mention of whether it was being held in an interest bearing account. The landlord made an agreement in writing stating that whilst the agreement was between themselves, the details of the contract would remain the same. He also acknowledges the receipt of the £500 with no mention of interest or confirmation that the deposit would be held in a separate account or the details of the account. The last year (from 2nd April 2015 - present) it has been deposited with the DPS which I am aware is not interest bearing. I also confirm that a fresh contract was made after the date when the DSP was a legal requirement and that the landlord did not fulfil his obligation.
Unless otherwise stated there is no obligation to pay interest. Therefore there is no obligation to do so in an interest bearing account. The requirement to protect a deposit came in on 5th April 2007, so if they renewed AFTER this period without protecting the deposit then the Landlord acted illegally. I note it was a new agreement on 2/4/15 but if there was an agreement before 2015 but after 2007 the Landlord is in breach.Can I clarify anything for you about this today please?Alex
Customer: replied 1 year ago.
Yes, the landlord renewed the contract in April 2008 so is in breach. Can they take action?
Yes they can.Does that clarify?Alex
Customer: replied 1 year ago.
Thanks Alex. Just one last point. I understand that they can claim compensation of up to three times the amount of the bond, would this be pursued via the small claims court?
Yes it would, assuming the claim is £10,000 or below.Does that clarify?Alex
Customer: replied 1 year ago.
Thank you. Yes, that clarifies the position. Many thanks for your help
Great. If I could ask you to rate my answer before you go today, otherwise the site does not credit me for the time spent with you. Thanks and good luck. Alex
Customer: replied 1 year ago.
Yes, of course, I'd be happy to. I almost forgot to add, as the deposit was £500 would they be entitled to claim for £1,500? If so, I will get proceedings started.
Thanks again.
Yes, PLUS the return of the original deposit.Does that clarify?Alex
Ash and other Property Law Specialists are ready to help you
Customer: replied 1 year ago.
Yes and thank you again. I did not realise it was on top of the original £500! I'm rating you 5 stars as I'm extremely happy with the advice you've given.All the best,Nicola
Yes. good luck.Alex
Customer: replied 1 year ago.
Alex,I have been reading up on the situation about my parents deposit being paid in late by the landlord then subsequently protected 14 months ago. I have come across the Deregulation Act and it contradicts what you have stated. Here's what is concerning me:[The law on tenancy deposits taken before April 2007 has been clarified and landlords who either protected late or returned the money or ended the tenancy (as long as the step taken was before 23rd July 2015) CAN NOW NOT BE ORDERED TO PAY DAMAGES. This essentially reverses the decision in Superstrike Ltd and Rodrigues [2013].]Surely this means that as the landlord employed the services of an estate agent who placed the deposit in a scheme on 2nd Feb 2015 they cannot claim for damages?Please clarify as I need to start written communication with the landlord.
No because the decision is Gardner v McCusker [2014] which says everything must be protected and reserved etc.Does that clarify?Alex
Customer: replied 1 year ago.
Yes, thank you again. Just had a wobble for a moment. I like to be 100% sure before taking action.Many thanks,
Of course Nicola. Alex
Customer: replied 1 year ago.
Am I also correct in saying that the estate agent should have returned the deposit prior to issuing a section 21, or has the deregulation abolished that practice? The deposit was paid into the DPS on the 2nd February 2015.
You dont have to have it returned no, but you are requited to have the prescribed information. Alex
Customer: replied 1 year ago.
Thank you
Happy to help. Alex
Customer: replied 1 year ago.
Hi Alex,First of all I apologise for repeatedly contacting you about this matter. I realise that your expertise should be credited and and happy to reimburse for the time you have spent.I am currently responding to the DPS to retrieve my parents deposit which was released by the landlord on the 11/04/2016. As I mentioned earlier, an estate agent has dealt with the rental since February 2015 so the deposit was protected by them. However, as I read the details it appears the deposit was not protected for just over 3 months. I have attached a screenshot and would ask that you take a look.If you agree they also are in breach, should I still accept the deposit to be returned and also should I proceed the same way with the agent as I intend to proceed with the landlord? Technically, can I claim from both parties individually for the same issue?Many thanks and please let me know how much to recompense you for your time.Nicola
You only ever sue the Landlord, not the agent. Does that clarify? Alex
Customer: replied 1 year ago.
So, in light of the fact that the agent didn't pay the deposit into the required scheme for three months, would I claim damages twice to the landlord i.e. 3 x deposit twice?
If they failed on two occasions then yes. Alex
Customer: replied 1 year ago.
Thank you. Should I proceed for the full amount (3 x deposit x 6) in one claim or do I need to open two separate ones?
Customer: replied 1 year ago.
Sorry 3 times deposit x 2
You can bring one claim. Alex
Customer: replied 1 year ago.
Thank you. I will now proceed with the claim and update you with the outcome. Once again, many, many thanks for your help and please don't hesitate to let me know if you require additional funds to cover your time and knowledge.Nicola
Customer: replied 1 year ago.
One last though on this. Technically, the rental contract was renewed a total of seven times without the deposit being protected. Could I claim for three times the deposit x 7? Or is that too much of a stretch.
Too much I think! Alex
Customer: replied 1 year ago.
Ok, I'll stick to the two claims. Thanks Alex
Good luck! Alex