Further Warnings to Landlords about Tenants Deposit Protection

by Mary Latham

17:21 PM, 9th December 2011
About 9 years ago

Further Warnings to Landlords about Tenants Deposit Protection

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Further Warnings to Landlords about Tenants Deposit Protection

Following my blog The Devil is in the Detail, I want to pass on some information that will help landlords avoid being caught out.

  1. “When you protect a deposit you are asked if there is a third party who has provided the deposit.  Most of us assume that the tenant has provided their own deposit and click the NO box. But did we actually asks the tenant?”

In a recent case, the Mother of a tenant had provided the deposit and, because the landlord was unaware of this, he did not send her a copy of the Protection Certificate and prescribed information about using the scheme. As a result, the mother was awarded 3 times the deposit by the courts.

Good practice- and I shall certainly be doing this myself in future- is to tick the YES box and cut and paste the form onto a word document. When a tenancy is agreed, I am going to ask the tenant to complete the application form and sign it. I will the use the information that they have provided when I protect the deposit on the online form. This has three purposes:-

  1. They will have signed to say that they have given me the information and cannot then claim that I have excluded a third party (if there is one) or not included a valid contact address for after the tenancy has ended;
  2. The tenant will know from the outset that I am a professional landlord and will have more confidence handing over the deposit to me;
  3. It will save me time when I complete the online form.

I only use MyDeposits, other schemes may have different paperwork so you should check this out.

  1. “Many landlords do give the tenant a copy of the Protection Certificate within the legal deadline (currently 14 days but about to rise to 30 days as I said in my first blog) time but we must also give the prescribed information about the scheme. If you do not give this information to tenants you will not have met your legal obligations.”

These documents must be sent to everyone who is involved, all those who contributed to the deposit (if it is a joint tenancy) and anyone who gave them the funds as described above.

The information is on the MyDeposits website and I am sure that the other two schemes will also provide the information on their website.

Many landlords believe that, because there is a “Lead Tenant” who will be the main point of contact for the deposit scheme, they do not need to give copies to anyone else but this simply is not the case. You must give copies to everyone involved.

As an aside,  I heard a case of a mother who tried three times to pay her sons rent to the landlord but the landlord told her that she only accepted rent from “the lead tenant”. This was a joint tenancy for a group for a group of students.  Could you imagine what the courts would make of a landlord would refused the rent three times and then took legal action when the tenant did not pay?! The “lead tenant “is for the purpose of tenancy deposit protection and in all other circumstance all tenants are equal “jointly and severally responsible”

I am sure that I don’t really need to say this, but for clarity, if you refuse rent that is offered in legal tender do not expect to win if the tenant refuses to pay and you take legal action. This also applies to those landlords who “insist” on a direct debit.  This might be your preferred method of payment but if a tenant offers you cash or a cheque (with time to clear by the due date) just say “thank you” and if it is cash issue a receipt or, better still, a rent book.


Mary Latham

2:49 AM, 18th December 2011
About 9 years ago

Taking two months rent up front may avoid tenancy deposit protection but it give the tenant a Premium Tenancy and therefore the right to sub-let without a landlords permission

john lown

16:17 PM, 19th December 2011
About 9 years ago

May I put this up or discussion.

If a tenant gives the landlord cash or their own cheque for a deposit ti is deemed to be from them unless stated otherwise.

With regard to date of deposit, the Court of Appeal have established that a deposit can be paid up to the day before the court hearing. ( Tiensa v Universal Estates - May 2010, and Honeysuckle Properties v Fletcher & others )

Precedent established, but please consult a good solicitor if in doubt.

I further suggest the mother receiving 3 x
deposit should be overturned unless there was hard evidence that the deposit was given by that mother, and the landlord accepted this fact.
John Lown.

Mary Latham

21:55 PM, 19th December 2011
About 9 years ago

The cases that you have mentioned were, in my opinion, the reasons that these changes are about to be made. At this moment landlords may get away with late protection but once these changes take place, at a date not yet confirmed but likely to be April 2012, late protection will not be allowed. The reason I gave landlords this warning is because many are relying on the cases that you have mentioned.

You may well be right about the mother who got 3 times the deposit returned to her and I am not clear what evidence she gave to prove that she provided the deposit but the fact is that untl this ruling is overturned landlords need to cover their backs by asking the question and ensuring that then they complete the deposit protection application they know for a fact that there is no third party involved in providing the deposit. I would agree with you that a cheque drawn on the tenants account is good reason to believe that the tenant has provided the deposit but I dont know many landlords who accept cheques for deposits. I always ask for cleared funds, cash or bank transfer..

I was discussing this with a landlord last week and he said that the father of a new tenant had handed him the deposit in cash but it had not occurred to him that this meant that he was a third party providing the deposit, nor was he aware of the implications of that situatuon. In the past I have accepted deposits from the parents of students and it did not occur to me either.

I do agree that any landlord who is not clear about anything that is said on this thread or any other should take legal advice or read the changes to tenancy deposit legislation in the Localism Act. The important thing is not to be caught out

Mark Alexander

22:26 PM, 19th December 2011
About 9 years ago

I don't mind admitting, the landlord who wasn't aware of this ruling was me! Thanks for the 'Heads Up' Mary. That's what I created this website for 🙂

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