Serving a Section 8 but tenant has paid part of the rent using deposit

by Readers Question

15:02 PM, 6th February 2016
About 3 years ago

Serving a Section 8 but tenant has paid part of the rent using deposit

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Serving a Section 8 but tenant has paid part of the rent using deposit

Not having had experience with evicting a tenant I would really appreciate some advice – Serving a Section 8 but tenant has paid part of the rent using deposit

Briefly, I have a tenant who missed his £700pm rent payment in December 2015 – when (eventually) I made contact with him, he said he was leaving the flat at the end of the month and I should take the money out of his £1,000 deposit – I told him that I would need him to sign something to that effect. He signed a note to say I could deduct money for the period 1 Dec to 1 Jan ’16 (£700).

He did not move out when he said. After a face to face meeting again, he promised to move out after a week which he didn’t. Then it was the following week etc. etc.

He paid £400 direct into our bank account in January, still promising to move out. In fact, he allowed a couple of viewings to go ahead on Saturday 23rd January so we could re-let the property – we agreed with one of the couples that they could move in on 6 Feb (today!) – the agent credit checked and referenced them etc. and we were ready to go.

On Saturday 30th January, my husband called him to check all was well and to find out what time he was leaving to arrange the key handover etc. The tenant told him he was not moving out afterall and we would have to take him to court to get him out then hung up. We have had no contact with him since then – we don’t want to be accused of harassment.

The new tenants had to be told they couldn’t move in.

On Monday we contacted Landlord Action and they were going to serve a Section 8 and a Section 21 for us. We have completed all the paperwork and given them copies of the AST, rent deposit registration (TDS).

Landlord Action have now said we should only serve a Sec 21 as he’s not 2 months in arrears – he did not pay his rent on Monday 1st February either.

I am wondering therefore how arrears are worked out – if a tenant pays only part of a monthly rent for 2 months – is he in fact 2 months in arrears or not? Do we have to wait until the arrears total £1,400 regardless of how long that takes to accumulate?

Also, would our case be stronger as he gave notice and then didn’t actually go? Landlord Action have said potentially a court could rule in his favour and we might have to pay thousands of pounds. I am sure this is their standard stuff to say but why on earth would a court rule in his favour? The flat is immaculate and we have never had any complaints from him about anything.

He signed his tenancy agreement on 1 May 2015.

The gas safety certificate is due soon too!

Help please!

Thank in advance.

Sally



Comments

Mark Alexander

15:06 PM, 6th February 2016
About 3 years ago

Hi Sally

Landlord Action are considered by many as the leading experts in tenant eviction, you should be in safe hands.

I'm not an expert in this area as I've had so few evictions to deal with in my 26 year landlord career. However, if other members post comments on this thread which contradict the advice you have been given then I would suggest you ask to speak with Landlord Action founder Paul Shamplina and mention that you are a Property118 member.
.

Sally Tattersall

17:06 PM, 6th February 2016
About 3 years ago

Reply to the comment left by "Mark Alexander" at "06/02/2016 - 15:06":

Thanks Mark, I'm pleased that LA are highly rated!

Michael Barnes

15:27 PM, 7th February 2016
About 3 years ago

it is my understanding that if the tenant gave written notice to quit that you accepted, then the tenancy ends on the agreed date and you can go to court on that basis; if it was not in writing, then there is nothing you can do on that front.
However, if written notice was given and you accepted £400 in January, that could complicate matters, but could also be considered to be payment of December rent, not January rent.

To serve a valid S8 notice based on arrears, then there must be 2 months unpaid rent at date of service (and at date of hearing), i.e. £1400 in your case. As it is now passed the February due date, he may well be 2 months in arrears if no further payment has been made. (Dec, Jan, Feb rent due; only £400 paid)
Landlord action were probably right on 1 Feb as tenant had until the end of the day to pay and would not be 2 months in arrears until the 2nd.

The deposit remains in place until the tenancy ends, so that should not count as 'rent paid', as you cannot access it until the end of the tenancy.

Sally Tattersall

15:36 PM, 7th February 2016
About 3 years ago

Reply to the comment left by "Michael Barnes" at "07/02/2016 - 15:27":

Thanks Michael - he kept saying we owed him money (the deposit) so he was adamant we took £700 for December. In this letter he states that he will hand the keys back to us - letter dated 27.12.15 so I'm guessing we do have his notice to quit in writing.

We did not want him to use the deposit but he insisted. Trouble is, he is very aggressive and not rational.

The £400 was paid directly into our account so we had no choice in accepting it.

Anthony Endsor

19:44 PM, 7th February 2016
About 3 years ago

For a start, what was the deposit doing being available for him to use in the first place? It should have been in a deposit scheme as required by law.
You should never allow a tenant to use the deposit as rent, even under written notice this is very bad practice as tenants very often don't leave on the date they are supposed to and then it's up to you to take them to court. The idea of the deposit is, it is supposed to cover at least some of the costs involved in a tenant leaving, i.e. rent arrears, court costs, etc, but if you accept it as payment for rent, it is no longer arrears.
The way a court would see it, (for section 8 purposes) they don't look at the deposit, but only whether the tenant is in arrears to the tune of 2 clear months. If you have accepted the deposit as payment, as far as they are concerned, it is paid. You then no longer have that hold over the tenant, so if they damage the property or incur further costs when leaving, you would be out of pocket.

Sally Tattersall

21:12 PM, 7th February 2016
About 3 years ago

Reply to the comment left by "Anthony Endsor" at "07/02/2016 - 19:44":

Hi Anthony, you are absolutely right about the deposit not being available to the tenant. It is in a deposit scheme but because we have a letter from him giving us permission to use it against his arrears, Landlord Action are saying we have used it so it's not arrears!!

We have not accepted it other than being in possession of the letter he gave us.

The money is still in the account which it was paid into on the 1st May 20015.

I think I may take Mark Alexander's advice and speak directly to Paul Shamplina, the founder of Landlord Action as I believe the 'paralegal' person dealing with our case is getting confused/not understanding the situation correctly.

We told the tenant at the time, his deposit was not a rental payment but he did not seem to understand this and kept saying we owed him money and not visa versa.

Anthony Endsor

21:48 PM, 7th February 2016
About 3 years ago

Oh well if the money is still in the deposit scheme I cannot see how anyone could say it is being used as rent payment. You'll need to prove this to the court however if it comes to it.
I would indeed speak to Paul Shamplina and perhaps try and make sense of what their thinking is at Landlord Action.
And if the tenant now tries to say you owe him money, ULTIMATELY you probably could say the money is being retained as payment for rent arrears AFTER he has left the property. Obviously though you can only keep back what he actually owes unless there is damage to the property. At that point you would need to write to the company the deposit is in to explain the situation.
The fact the tenant doesn't understand shouldn't be a problem other than the nuisance letters you may get from him in his ignorance.

Mark Alexander

22:10 PM, 7th February 2016
About 3 years ago

Having thought about this further I believe you may be in a position to get an immediate Court order and to claim *mesne" (pronounced "mean") profits, I.e. Double rent from the day he was scheduled to vacate.

Definitely speak to Paul Shamplina.
.

Michael Barnes

3:27 AM, 8th February 2016
About 3 years ago

Reply to the comment left by "Mark Alexander" at "07/02/2016 - 22:10":

Isn't it 'mesne' profits?

Mark Alexander

10:21 AM, 8th February 2016
About 3 years ago

Reply to the comment left by "Michael Barnes" at "08/02/2016 - 03:27":

It is indeed 'mesne' profits Michael.

I typed the comment on my iPhone so I suspect auto correct changed it for me - GRRRR!!!!

I have now corrected my original comment, thanks for pointing this out.
.

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