Conflicting S21 advice on late deposit protection?

by Readers Question

11:07 AM, 15th August 2018
About 2 years ago

Conflicting S21 advice on late deposit protection?

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Conflicting S21 advice on late deposit protection?

I served a Section 21 notice on a tenant in May 2018 and when it expired in July I instructed a firm to apply for a possession order. It then came to light that the managing agents had issued the Prescribed Information in time, but not protected the deposit for approx 40 days rather than within 30. In case it is relevant the tenancy agreement is dated September 2013.

Having admitted their error the agents agreed to refund the deposit at their expense, but were not able get bank account details from the tenant so they waited for instructions from me. I sought advice from the NLA who advised that a cheque hand delivered by two people (one to act as a witness) would be an acceptable means of returning the deposit and that I could then issue a new S21 a few days later. They stated it is not necessary to wait for the cheque to clear. We followed this advice and a new S21 was issued a few days later.

A few weeks have now passed and I spoke to solicitors today to prepare well in advance for the application for a possession order. Their advice is totally different from that of the NLA. They state that if the cheque has not cleared before the S21 has been issued the judge may determine the deposit has not been returned and the S21 to be invalid.

So I asked the agents to see when the cheque cleared and discovered it hasn’t been banked. We can prove the tenant received the cheque but as they haven’t banked it the solicitors state the judge could consider the deposit hasn’t been returned.

I then rang the NLA again today, told them the situation and asked if their advice remains the same i.e. that a cheque with witness statements of delivery is sufficient to satisfy the courts that a deposit has been returned. Their advice remained the same and the person I spoke to even checked with other colleagues before ringing me back. They were adamant that providing you can show all reasonable steps have been taken to refund the deposit by hand delivering a cheque with a witness this is acceptable and we should press with the application for a possession order.

So here we are with 2 contradictory opinions not knowing whether we should apply for a possession order or whether we need to find another way of refunding the deposit before issuing yet another S21. If the tenant sits on the cheque for months deliberately what can we do? The solicitor suggests handing the tenant cash in front of a witness who saw it counted but of course he may not be willing to accept it and in any case I live hundreds of miles away so this would be difficult.

Of course the agents should deal with this but they are a large chain with a dedicated legal department and are not being very co-operative.

Any advice or suggestions from those in the know or who have been through a similar experience would be appreciated but most importantly does anybody have first hand experience of who is correct – the NLA or the solicitors?




9:49 AM, 16th August 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 15/08/2018 - 13:28
Thank you Monty. I will look into this today. The case law should be very helpful.


16:21 PM, 16th August 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 15/08/2018 - 22:10
The Tenancy Deposit Schemes (Scotland) Regulations 2011
The Tenancy Deposit Schemes (Scotland) Regulations were introduced in Scotland on 7th March 2011. To comply with the Regulations, any landlord or letting agent in receipt of a tenancy deposit must:
Transfer the deposit to a government approved scheme, such as SafeDeposits Scotland, within 30 working days of the tenancy start date;
Provide all tenants on the tenancy agreement with particular key information, including confirmation of which scheme holds the deposit and when all or part of the deposit may be retained at the end of the tenancy. To help make this step easier, we have created a template, called the Prescribed Information template, which landlords can complete and give to their tenant(s) following the transfer of the deposit to SafeDeposits Scotland...…...I think there is a MAYBE

Monty Bodkin

17:12 PM, 16th August 2018
About 2 years ago

Reply to the comment left by AA at 16/08/2018 - 16:21"Scotland...…...I think there is a MAYBE"
This isn't about a tenancy in Scotland.
So no, there is no 'maybe'.


17:45 PM, 16th August 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 15/08/2018 - 13:18
Monty thank you for the reference to Lingfield Point No. 2 v Hodgson which I found very helpful.
I spoke to the solicitor about this today and his view is that unless our tenant also paid the deposit by cheque as in the Lingfield case it might not be that helpful to us.
Do you think he is being overly negative or is there some merit in this?


18:07 PM, 16th August 2018
About 2 years ago

Reply to the comment left by Judith Wordsworth at 16/08/2018 - 00:26
Thanks for your comment Judith. In respect to a fine for late registration I have asked the agent to confirm the indemnity insurer is on notice that a claim may follow.


18:09 PM, 16th August 2018
About 2 years ago

Reply to the comment left by Martin Thomas at 16/08/2018 - 08:40
Thank you Martin. I have done just that and await their response. I am hoping to avoid litigation but if they don't take responsibilty for resolving the issue soon I will presumably need to appoint a solicitor. What an enormous waste of time, money and effort!

Judith Wordsworth

18:42 PM, 16th August 2018
About 2 years ago

Are the Agents a member of any association? Could contact them regarding their member.
I was in a similar position with my recent nightmare as the letting agent didn't put the deposit on protection within the 30 days.
Does the tenant owe rent? If they do might be worth waiting until 2 x the monthly rent in arrears and give notice under a s8


19:02 PM, 16th August 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 16/08/2018 - 17:12What I said was ( Basis living in Scotland) " maybe the regulations are different. North of the border its 30 working days" … so they are different. Ergo my maybe stands and now has moved to ...they are. And in agreement with you.

Rob Crawford

18:40 PM, 17th August 2018
About 2 years ago

Reply to the comment left by Kate H at 16/08/2018 - 18:09
...and new agent!

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