Can I file an N5b with an unprotected deposit?

by Readers Question

14:27 PM, 4th May 2016
About 3 years ago

Can I file an N5b with an unprotected deposit?

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Can I file an N5b with an unprotected deposit?

Its the first time I’ve ever rented my flat, and at the time didn’t know about the government rental scheme, I just took the deposit and kept in a safe account separate to others until the time came when I had to give it back.deposit

Unluckily for me, my first tenants haven’t paid a penny since they moved in, and I’m now trying to evict them. I’ve served the section 21, and am now trying the file the N5, BUT, this needs to be complete with the scheme reference – which I don’t have.

Can this be filed without one, it doesn’t seem to be the case.

Thanks in advance

Nicholas



Comments

Ross McColl

14:37 PM, 4th May 2016
About 3 years ago

I'm sorry to say you are not the first person to be caught out by this. Your Section 21 has no validity. Does waste your money issuing it to court as it will get thrown out. Protect the deposit asap, then re-serve the Section 21 and hope the tenant doesn't try to claim 3x the deposit back form you in court. Make sure that if your tenancy started after 1st October 2015 that you have served up to date GSC, EPC and How to Rent Guide, before serving Section 21. Good luck.

Clint

9:58 AM, 5th May 2016
About 3 years ago

I had recently (November 2015) applied to the court using an N5B form to gain possession of a property. I had forgotten to protect the deposit after a statutory periodic tenancy had arisen although, I had initially protected the deposit for the Assured Shorthold tenancy and the judge stated that the application was invalid. As the tenant had owed me more than the deposit, as a clever sneaky ploy I suggested to the tenant that I would help him out with his rent arrears by returning his deposit and he could then reduce his arrears by paying the money back to me and deducting from his arrears which would make his debts more manageable.

I had also advised him that I would otherwise be evicting him using a section 8 notice where it was highly likely that he would get a County Court Judgment. The tenant agreed to sign a letter stating that his deposit was returned and I sent this to the court stating that the deposit was returned and requested possession of the property. It actually worked and I gained possession of the property after the judge ordered the tenant to leave by a certain date and an application was made to the bailiff.

This is a very tricky one as I don't believe all judges would agree to give possession based on the steps above.

It sounds like that your tenant is more than two months in arrears (where I assume the rent is payable on a monthly basis) in which case, I suggest that you serve a section 8 notice and thereafter apply to the court for possession where the judge would order the tenant to give possession of the property and the tenants would also get County Court Judgments.

As you have not yet paid any court costs, I believe your best bet would be the section 8 route.

Hope this is of help.

Rob Crawford

12:49 PM, 5th May 2016
About 3 years ago

Nicholas, I agree with Ross. Whether its a section 21 or 8, your notice is invalid if the deposit is not protected and you could end up with a 3 x fine for not doing so and no way forward with the tenant. Protecting a deposit now is a damage limitation strategy and may or may not appeal to the judge. If the tenant has a good solicitor this is going to cost you. Best to protect the deposit now and try to talk to the tenant about their rent arrears. If you have missed the obvious importance and wide publicity of the need to protect a deposit I am wondering what of the many other pit falls you have missed. I strongly suggest you seek legal advice on what you do now!

Clint

13:53 PM, 5th May 2016
About 3 years ago

Reply to the comment left by "Rob Crawford" at "05/05/2016 - 12:49":

The section 21 notice would definitely be invalid as the deposit is not protected.

A section 8 notice can however, be served regardless of the position regarding the deposit, although the tenant may still claim for the penalties in respect of the breach of not protecting the deposit within the statutory 30 day period.

The ability to serve a section 8 notice depends upon establishing a ground for possession. If for example the tenant has ceased paying the rent, this can be a useful way to end the tenancy early and recover the property.

One of the problems that could possibly arise with the section 8 notice and having not protected the deposit is that a savvy tenant may make a counter claim of 3 times the deposit on the day of the hearing (if this is at all possible in such a hearing) where the judge would more than likely act in favour of the tenant.

This would mean that the tenant would have to be at least five months in arrears if rent is paid on a monthly basis for the judge to give an order for possession which could prove to be a costly exercise if the tenant is not ordered to leave.

I believe that an eviction using a section 8 notice would be a good bet as there is a good possibility that the tenants would not be aware that they could claim 3 times the deposit. I also believe that a claim for up to 3 times the deposit would have to be made by the tenant on a separate application.

There may also be the possibility of negotiating with the tenant to leave the property where an agreement is drawn up that the tenancy has been terminated where by mutual agreement no monies is owed by either party.


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