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F E Smith
F E Smith, Advocate
Category: Property Law
Satisfied Customers: 10226
Experience:  I have been practising for 30 years.
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I have a problem with a property i have let out

Customer Question

hi i have a problem with a property i have let out
Submitted: 1 year ago.
Category: Property Law
Expert:  F E Smith replied 1 year ago.

Could you explain your situation a little more detail please?

Customer: replied 1 year ago.
hi, ok i have house on rent with ast agreement from march 2016, to march 2017.
The rent is 1350pm. Since then tenant is giving me nothing but hassle. three times he has told he is moving because it is too expensive and then he doesent. This causes me a lot of inconvenience.
The rent is due on 19 every month.
he gave me notice twice that he is leaving on october 18. because he did not pay rent last month from august 19 to 19 i september i then went to see him.
he said he is having problems with finance therefore he is moving out. Shame he really wants to stay because of area. I said to him i may reduce price to agreed 1150-1200pm. He also told me that he had left a deposit on another property.
he said he will talk to his wife and if rent can be reduced he would require new contract.
The next day, he phoned me in evening to put price to 1150 and to give him new contract he will stay. i did tell him i dont think i can do it as price is just too low.
On the following day he phoned me to say he needs answer end of the day as he has left deposit elsewhere. I said to him that i cant give you contract at moment because of my finance position and i would let him know in 1-2 weeks time, but he was very impatient and told me he needs answer the same day.
I gave him answer the same day at 15.00 hours that i cant do it and told him to move on and i will see you on 18 october 2016 to collect keys.
Then the next day he phones me to tell me that he will now be staying and he will not go anywhere as he had lost his deposit because of me. I asked him how did you lose deposit because of me? he said i trusted you to reduce price and he told other landlord he no longer wants to go ahead. I said to him you should of not said that until you had received new contract from me.
Anyway, he still has not paid last month rent and told me to use rent for the deposit he gave me, i agreed.
Now he is saying to me that i can stay here for 6 months and i cant do anything about it and i have to go court, at same time he said to me he would pay 1150 a month with no deposit on rolling month contract as he is still seeking for another place to live.
Problem is I did not know until know i had to register his deposit, but does law still stand if he has given me permission to use last month rent as his deposit.
Please help me.
Expert:  F E Smith replied 1 year ago.

I’m afraid that ignorance of the law is no defence. You didn’t protect the tenants deposit in a recognised scheme and hence, the tenant can claim to 3 times the deposit from you as compensation if he decides to take you to court.

You cannot use the section 8 or section 21 procedure to get rid of him because you have failed to comply with your statutory obligations in respect of the deposit. It would need a bespoke court application to get him out.

You now need to protect the deposit in a recognised scheme and give him the details. Then you can use the section 21 and section 8 process to get him out .

Even then, and even after he leaves the property, he can still bring the claim for three times the deposit from you.

It potentially gets worse and if the tenancy has ever been renewed or rolled over into a periodic tenancy, each of those renewals is a further breach. Hence, if the initial term was for 6 months and he does just rolled over since, you are potentially at risk for six times the deposit to him. The courts will not routinely award six times the deposit that is the problem that you potentially face.

Many solicitors are now actively looking for this kind of work and trying to find tenants whose deposit has not been protected, with a view to suing the landlord. They will do these on a no win no fee basis because there is no defence the landlord can put forward.

Customer: replied 1 year ago.
thank you for your reply.
tenant has told me to use last month rent from his deposit which i have done as he has no money.
he now wants me to give him property for 1150 a month without a deposit.
how do i go on about registering deposit as he would not have deposit in next month rent?
Expert:  F E Smith replied 1 year ago.

What you are doing is returning the deposit to the tenant. You are then saying that you do not require a deposit. The tenant is then using the deposit to pay you the rent. It’s a different way of doing it.

You need to protect the deposit before you remove it because then, you can issue a section 21 notice.

Customer: replied 1 year ago.
if i register deposit today, and remove it on 18 october, can i then apply for section 21 notice as he will not pay rent?
Expert:  F E Smith replied 1 year ago.

That’s right. You cannot rely on the section 21 notice the deposit has been protected. That’s why I said to protect the deposit, issue 21 notice, remove the deposit give it back to the tenant, take it back as rent.

I would issue the section 21 notice while the deposit is protected. Then remove it.

You cannot issue a section 21 notice to expire before the end of the term. You may be able to rely on the section 8 notice in respect of rent arrears.

Customer: replied 1 year ago.
ok so you are saying protect deposit then remove it, then issue section 21?
would i still be breaking the law as tenant has given me permission to use it as for rent.
Expert:  F E Smith replied 1 year ago.

You have broken the law by not protecting the deposit. You have to protect the deposit.

If you have not protected deposit you cannot issue a section 21 notice.

You can return the deposit to your tenant and then issue a section 21 notice but there is no guarantee that your tenant will give you the deposit back as rent.

If this then ended in court, the court would treat this as deposit, not advance rent and your section 21 notice.

Customer: replied 1 year ago.
if i protect deposit and remove straight away the court will not see this? if they do then will i get fined?
Customer: replied 1 year ago.
also, it is asking me when did i receive deposit? do i put todays date or when contract started which is 19 march 2016. he has not paid rent from 19/08/16 to 19/09/16, or do i put either of these dates?
Expert:  F E Smith replied 1 year ago.

The court doesn’t fine you with its own volition. If the tenant applied to courts, it would be the court that awarded the compensation. He would need to drive it. The court will not drive it.

You receive the deposit on the date you received it and if that was the date that contract started, that was the date the contract started

Customer: replied 1 year ago.
ok, so what you are saying is if i apply to courts for his removal etc nothing will happen regards ***** ***** scheme matter? but if he raises this with the court then i could potentially get fined?
also, i have now registered the deposit. what do i do now?
Expert:  F E Smith replied 1 year ago.

If he submits a claim to the court you will get a penalty awarded in his favour and against you against you of up to 3 times the deposit plus if he uses solicitors, solicitors costs which could be as much again.

I would wait a couple of days, and return the deposit to him in full bearing in mind what I said earlier about him not giving it back to you as rent.

I would get the rent off him and then issue the section 8 and section 21 notices.

Customer: replied 1 year ago.
are you saying that i should get rent for 1150 of what he wants to be rather than the 1350 which is what hes contracted to until march 2017?
Expert:  F E Smith replied 1 year ago.

I didn’t say that. At the moment, the more you push him, the more likely years to take you to court. I think the only reason he hasn’t taken you to court now for the three times deposit is because he isn’t aware he is entitled to it. The more you push him, the more chance he is likely to take legal advice and the more chance there is that you are going to get sued for the deposit. You don’t have to take anything from him other than the rent in the tenancy agreement.