Deposit issue – paid 2004?

by Readers Question

14:57 PM, 4th January 2021
About 4 months ago

Deposit issue – paid 2004?

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Deposit issue – paid 2004?

My tenant paid their cash deposit at the start of the contract in July 2004. This was never protected (only tenancies signed after April 2007 need the deposit to be protected), and the contract has remained the same – no amendments, no updates etc.

The rent has increased over time, so now I think it is about time the deposit needs to reflect the current 5 weeks rent/deposit basis.

I assume if she pays the difference up to the 5-week max, I now need to protect the lot in a protection scheme. Not an issue, but clearly the date the contract started and when the initial deposit was paid is years different! Is this going to be an issue?

Do I use the date that the top-up deposit is paid to me and when I deposit ALL the money in the scheme as the deposit start date?

Or is it better to do nothing at all and not increase the deposit (she is a perfect tenant and looks after the place lovely) and leave things as they are?

Reluctant Landlord

Comments

Neil Patterson

15:00 PM, 4th January 2021
About 4 months ago

If I had been a perfect tenant for 16 years and suddenly received this request I would feel quite put out.

The Goodwill of a tenant is far better than any legal protection you don't receive now.

Julie Ford

15:29 PM, 4th January 2021
About 4 months ago

In June 2013 the Court of Appeal
handed down a judgment in Superstrike Ltd v Marino Rodrigues.
This related to a tenancy deposit taken on a fixed term assured
shorthold tenancy before 6 April 2007. The tenancy subsequently
became a statutory periodic tenancy after 6 April 2007. The Court
of Appeal ruled that a statutory periodic tenancy is a new tenancy
and as such the deposit should have been protected when that new
statutory periodic tenancy was created.

David

18:53 PM, 4th January 2021
About 4 months ago

It hardly seems worth the effort or the risk of having to defend a court case for a few extra quid, especially as the amount of damage and/or rent arrears that a tenant could potentially rack up far exceeds 5 weeks rent anyway. If current deposit turns out to not be enough then you claim the excess from them as a further cash payment and if they decline you sue through something like MCOL

Seething Landlord

19:45 PM, 4th January 2021
About 4 months ago

Reply to the comment left by Julie Ford at 04/01/2021 - 15:29
Correct, but in the present case it appears that the new SPT was in existence prior to 6th April 2007 so no new tenancy has been created after that date.

Seething Landlord

22:11 PM, 4th January 2021
About 4 months ago

Reply to the comment left by Seething Landlord at 04/01/2021 - 19:45
Also note that the issues arising from Superstrike were addressed by S32 of the Deregulation Act 2015 - the explanatory notes are available at https://www.legislation.gov.uk/ukpga/2015/20/notes/division/5/33/data.pdf

silversurfer2017

12:18 PM, 5th January 2021
About 4 months ago

If you have such a good tenant then I suggest you give all the deposit back to the tenant.
Why do you need to hold a deposit if the tenant is a good tenant who pays the rent regularly and looks after your property? I returned one of my tenant's deposit which had previously been held by a letting agent which was then returned to me. I did not want to put it into a deposit scheme and as the tenant was excellent in paying and taking care of our property I had no qualms in returning this money to the tenant and continue to rent out our unfurnished apartment without any deposit.

Mike T

13:30 PM, 5th January 2021
About 4 months ago

Reply to the comment left by Neil Patterson at 04/01/2021 - 15:00
Hi Neil,
the post by Reluctant landlord seems to suggest that it's he that was seeking to increase the deposit that was originally taken. Therefore, as others have already suggested, best advice may be either (a) Do nothing. or (b) Pay the deposit back to the tenant. ensuring that you get a proper , witnessed , receipt that you can attach to the tenants (and your) existing agreement. How does that sound ?

Steve Masters

13:51 PM, 5th January 2021
About 4 months ago

Not only do you have a 16 year old deposit and 16 years of good relations with your tenant, you also have a 16 year old tenancy agreement.

You might like to think about issuing a new up to date tenancy agreement. A lot has changed in the last 16 years!

I would also talk it all through with your tenant to retain your good relations.

Smartermind

14:06 PM, 5th January 2021
About 4 months ago

Reply to the comment left by Steve Masters at 05/01/2021 - 13:51
You can't just change the terms of a tenancy agreement because it doesn't suit you.

The landlord should just protect the deposit with an insured scheme. No real benefit will be gained by increasing the deposit amount.

terry sullivan

16:51 PM, 5th January 2021
About 4 months ago

if it aint broke--dont fix it

leave it alone!!

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