Deposit dispute – Ltd Company lodgers agreement?

by Readers Question

8:58 AM, 21st February 2020
About 3 months ago

Deposit dispute – Ltd Company lodgers agreement?

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Deposit dispute – Ltd Company lodgers agreement?

Are there any legal beagles that could help me deal with a deposit dispute? From advice I received a long time ago, I have my limited company give what I thought are lodgers agreement and therefore no need to insure the deposit. As my company is the tenant for the downstairs bar, I was advised that I can issue this type of contract.

The tenant was there for 12 months and had his deposit returned in full when he left in December. The tenant was happy not to be charged for wall damage but tried to get me to refund him for the week that he moved out earlier than the notice stated. I am a bit nervous with him so didn’t want to even talk about charging him for the damage, but said that I could give him an extra weeks rent back too!

I’ve had some issues with this tenant being threatening to me and a bit creepy personally as well as starting a fight with my bar manager one night. Not that this has anything to do with these issues but gives you an idea of the person.

Then I received a solicitors letter for 6 times the deposit (1 x 6 month and 1 x periodic tenancy) saying that lodgers contracts can’t possibly be given by a limited company.

In this case, I’m certain that I was in the wrong. I’ve been told in the letter to not contact him under any circumstances. So I’d like to know how to do damage control here and minimise any losses.

I’ll need representation to deal with these solicitors and possibly court proceedings if it comes to that.

Many thanks

Emma

 



Comments

Rob Crawford

9:25 AM, 21st February 2020
About 3 months ago

Hi Emma, do you live at the property as well?

Michael Barnes

3:56 AM, 22nd February 2020
About 3 months ago

It is true that one cannot be a lodger if the landlord is not a real person (a company is a legal person but not a real person).

6 times deposit sounds like it is more than a court would award under the circumstances, but judge may decide otherwise based on it being a company rather than an individual being penalise.

Uxucvhrtau

20:37 PM, 23rd February 2020
About 3 months ago

This sounds like you have either been ignorant or deceitful by issuing documentation towards your advantage and the disadvantage to the normal unknowing tenant/s which means its now your turn to feel the reaction of the action you took when you issued the wrong documents for the tenancy, you can but only pay what you owe and hopefully learn from the mistake towards being a better landlord and acting appropriately in the future.

There is no damage limitation to be done here.

Iain Wightwick

18:44 PM, 24th February 2020
About 3 months ago

You can ask the court to reduce the penalty, contrary to is said above. You can also counterclaim for any damage that the tenant did and try setting off the free week you gave him (if that is what you did, as it is not clear from your message). I would suggest that you go to see a competent local solicitor or barrister who says in their publicity or on their website that they are an L&T specialist. In future, while it may cost you more in the short term, you might want to get your legal advice from qualified lawyers, because whoever told you to organise your lettings as you did was ignorant of the law.


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