Deposit not protected and solicitor demanding six times deposit repayment?

by Readers Question

10:54 AM, 28th October 2020
About a month ago

Deposit not protected and solicitor demanding six times deposit repayment?

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Deposit not protected and solicitor demanding six times deposit repayment?

A tenancy started 7th September 2018, becoming a periodic tenancy on 7th March 2019. I did not protect the deposit until 14th October 2019, and understand I am liable for a fine. I’ve done wrong, I accept that, so no need to lambaste me over it.

The couple separated and the deposit was returned to her and an agreement reached with her that I would pay an amount equal to one months rent as a penalty. That was done in January 2020.

His solicitor is now demanding the deposit is returned (which it has already been) plus 3 times the deposit for not protecting it within the initial 6 month period, and a further 3 times for not protecting this when it became a periodic tenancy. They are asking for six times the deposit, plus their fees.

My understanding is the maximum I can be fined would have been three times by a court, not six. I cannot find anywhere, anyone being required to pay more than three times, so feel like their solicitor is trying to con me!

Maybe I’m wrong, so would appreciate any advice.

Many thanks.

Daniel


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Comments

Neil Patterson

10:57 AM, 28th October 2020
About a month ago

Hi Daniel,

The Solicitor is certainly trying to Milk it!

Maximum fine under Deregulation act id 3 times the deposit plus the deposit.

Fred Lawless

12:08 PM, 28th October 2020
About a month ago

From TDS website: 'The tenancy is protected under TDS deposit protection until its end. As the tenancy turning periodic does not indicate the end of the tenancy, then the deposit would not need to be re-protected provided the tenant(s), landlord(s), premise, and deposit scheme all remain the same.'

Mike

12:12 PM, 28th October 2020
About a month ago

It seems like the tenant went to seek the advice from a solicitor, using a no win no fee platform, solicitors has advised the tenant to pursue a claim against the landlord for 3 times the deposit plus solicitor adds his own charges equal to another 3 times the deposit so possibly offering the tenant 3 times and taking the case to a court if necessary where the court fees and legal charges would be added on top of 3 times the deposit amount awarded by a court, so for example a court could only award 3 times the deposit amount, but the solicitor will then add his own legal fees and court fees thus he is offering to settle it for 6 times the deposit amount.
I would destroy the solicitor's greed by approaching the tenant directly and making her another offer of say 3 times the deposit and withdraw her case from the solicitor, and possibly pay initial charges if she has to cancel a contract with the firm, and sign the legal papers with the tenant as acceptance in full and final settlement.
I hope the tenant has not signed a contract with her solicitor where if she withdraws then she could be liable for the legal fees so far.
This certainly looks like they got the landlords balls in their hands.

Or might be worth negotiating with the solicitor as well.

Gunga Din

12:22 PM, 28th October 2020
About a month ago

And there wasn't a requirement to re-protect the deposit when it became periodic. Wasn't that what Superstrike and the Deregulation Act 2015 was all about??

Chris @ Possession Friend

12:53 PM, 28th October 2020
About a month ago

I deal with these Counter-claims ( usually rather successfully ) quite regularly.

Simon Hall

14:01 PM, 28th October 2020
About a month ago

Unfortunately, some of responses you have received citing that you should be charged 3 X times maximum penalty is incorrect. The reason why, you have been asked to pay 6 x penalty is as you have failed to protect correctly during first tenancy. There is no requirement to reprotect only if you had protected correctly in first instance. Therefore maximum penalty would be claimed against you would stand at 6 X penalty.

However, since you have now protected deposit your culpability is reduced (assuming you have served correct paperwork albeit late) so in other words. despite the fact you did not protect deposit in time but you have done so. I believe if it went to Court you are likely to face 2 X Penalty in total. Again assuming you have served correct paperwork (albeit late) 1 X during fixed and 1 X during periodic. This is regardless of how much solicitors are seeking to claim. There are good defence advocates charging reasonable fixed fees to prepare a defence for you. Whatever happens do not settle out of Court more than 2/3 times deposit amount. As if they are not settling less than 6 times then you better off going before Judge and let him/her decide.

Chris @ Possession Friend

14:49 PM, 28th October 2020
About a month ago

Reply to the comment left by Simon Hall at 28/10/2020 - 14:01
There are a number of stated cases and legal arguments I use in corresponding with tenants solicitors that usually achieve a positive outcome.

David

15:46 PM, 28th October 2020
About a month ago

As Simon Hall says, you are liable for up to 3x the deposit as a penalty for each tenancy, therefore a maximum of 6x. If the tenant has a solicitor working for them then you definitely don't want this to get to court or else the legal fees that you would have to pay on top of the penalty would be eye-watering. I suggest you try to settle out of court. Your mitigation is that you did eventually protect the deposit and you have now returned the original. I would therefore offer a bit less than 6x. Perhaps 3x or 4x. I have no experience of actually doing this, so you might want an initial conversation with a housing solicitor to know how to pitch this.

Ian Cognito

16:42 PM, 28th October 2020
About a month ago

You say, Daniel, that the deposit was returned to her, after the couple split (with 1 x fine). Do you mean the full deposit or a share? Who originally paid the deposit and how was it registered?

Chris Bradley

17:28 PM, 28th October 2020
About a month ago

From the post there were two joint tenants. The deposit has been returned in full to one of them and an agreement made with one of them to give an incentive in lieu of a formal penalty. The one tenant accepted this. Therefore this one tenants action should be binding on both tenants and the tenant sueing needs to seek monies from tenant who accepted the end tenancy deposit deal.


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