Help I am being sued for not protecting the deposit

by Readers Question

11:43 AM, 27th November 2014
About 4 years ago

Help I am being sued for not protecting the deposit

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Help I am being sued for not protecting the deposit

I did not issue a deposit protection scheme for one of my tenants in a shared house. The other tenants have the DPS done within 30 days of deposit, but this tenant has been in since end of Sept.

I received a solicitors letter informing me that it is the law and I have to pay compensation to this tenant who is moving out this Sunday 30/11/14.

Can anyone advised what I should do as I have already told the tenant that I will refund his £425 deposit when he leaves on Sunday, but he is pursuing this compensation of my late registering his DPS.

Please advice what I have to do as the Solicitor demands around £700 of compensation and the tenants has only been in the house for 4 months.

Many Thanks

Carolsued



Comments

Mark Smith (Barrister-At-Law)

12:10 PM, 27th November 2014
About 4 years ago

The penalty for non-registration is 1 to 3 times the deposit value, in the discretion of the Court. £700 is about 1.6 times, so it falls in the middle. The option is to pay, or make them take you to court, and let the judge decide.

It is irrelevant that the tenant is moving out.

To be clear, it is £425 deposit + the penalty for non-registration that is owed.

Paul Franklin

15:08 PM, 27th November 2014
About 4 years ago

Either pay or take the risk of protecting the deposit now (late) (or at least advise them in writing that you are willing to protect it now) and hope that they either a) don't take you to court or b) if they do, the judge looks favourably on you as you have at least protected it (or offered to protect it/return it) as soon as you realised your mistake and only award 1 x the deposit as a penalty payment.

By protecting the deposit and not returning it, at least you still have it to claim on if the tenant casues damage etc before he leaves.

ian

19:23 PM, 27th November 2014
About 4 years ago

How about negotiating with the tenants solicitor start with say £500, increase the rent £20 for next tenant & gradually cover the cost.

Monty Bodkin

19:31 PM, 27th November 2014
About 4 years ago

Do you mean just the PI or you didn't protect the deposit at all?
Do you have a possible counter claim for the tenant breaking the agreement (in any way) and leaving early?
Is the rent paid up til leaving?
What condition will the property be in after the tenant leaves?
Consider if returning the deposit straightaway is in your best interest.
Check out the solicitor is genuine and that the letter really came from them.
Then negotiate.
And never be so daft as to make the same mistake again.

Andrew Turner

9:36 AM, 28th November 2014
About 4 years ago

Monty, I am not sure that Carol asked a question on this forum expecting to be told that she is "daft". A little harsh. We all make mistakes.

Carol - Mark Smith's assessment is correct. The court could order you to pay £425 x 3. My advice would be to make an offer of, say, £425 (as well as returning the deposit of course). The tenant will not want to incur irrecoverable legal fees pursuing a small claims case against you and may regard an offer of £425 favourably. A quick cash settlement may be appealing.

The law is against you on this I am afraid. You are going to have to try to negotiate a reasonable outcome.

Good luck. We all live and learn!

Andrew
Hughes Paddison Solicitors

Mark Smith (Barrister-At-Law)

9:49 AM, 28th November 2014
About 4 years ago

Reply to the comment left by "Andrew Turner" at "28/11/2014 - 09:36":

@Andrew Turner- you are only 6 doors away down the Crescent, why not pop in one day and say hello?

Andrew Turner

10:05 AM, 28th November 2014
About 4 years ago

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "28/11/2014 - 09:49":

What a small world, online or otherwise! I certainly will pop in. I am ashamed to admit I did not know you were a few doors away!


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