Tenant claiming deposit paid to agent who went bust 6 years ago?

by Readers Question

2 months ago

Tenant claiming deposit paid to agent who went bust 6 years ago?

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Tenant claiming deposit paid to agent who went bust 6 years ago?

In July 2006, I bought a 2 bedroom flat and leased it out to a company called London Housing Solutions (LHS). This company was featured on channel 4 in 2013. They sub let it and paid me a guaranteed rent each month in arrears. I did not receive a deposit. In 2012, the company went bust owing me several months unpaid rent.

I approached the existing tenant and we signed a new tenancy agreement in 2013, I did not receive a deposit from this tenant. Part of the tenant’s rent was paid for by the council and the tenant paid the rest.

Fast forward to 2018 and the council has reduced the award they pay towards the rent and the tenant is now accumulating roughly £150 arrears every month. The tenant is refusing to make up the difference in rent and has now claimed that she paid a deposit in 2006 and she has provided me with a copy of the tenancy agreement which mentions the £500 deposit.

She is now asking me to take the £500 deposit into account and deduct it from her arrears. Even if I deduct this, it will only postpone the inevitable arrears increase.

I’m very reluctant to do this as I didn’t receive it and I wasn’t her landlord at the time. In light of all the new regulations, I need some advice on what my position is and what is best to do as I intend to evict this tenant using a section 8 once her arrears are in excess of 2 months.

Thanks

Abi



Comments

Neil Patterson

2 months ago

As the original deposit was taken pre April 2007 I thought I would add the Deregulation act rules on the subject:

"But overall the Deregulation Act 2015 has provided much needed clarification on the steps that a landlord must take to comply with TDS legislation.
Deposits taken before 6th April 2007 and tenancies that became periodic before April 2007

Deposits don’t need to be protected if a tenancy deposit was received for a fixed term tenancy before 6th April, or if the landlord holds the deposit against a statutory periodic tenancy, which also started before April 2007.

However, if a landlord wishes to gain possession of the property under Section 21 of the Housing Act 1988, the deposit must be protected and the Prescribed Information issued to the tenant prior to serving the Section 21 notice.

Landlords will not face any financial penalties for non-protection of the deposit.
Deposits taken before 6th April 2007 and tenancies that became periodic after April 2007

Deposits taken before 6 April 2007, for tenancies that are still running and have moved onto a periodic tenancy on or after this date, now need to be protected in a Tenancy Deposit Protection scheme. If a deposit remains unprotected, the landlord could potentially face a fine.
Deposits taken on or after 6 April 2007

Landlords who took a deposit on an assured shorthold tenancy (AST) after 6th April 2007 and correctly protected and served the Prescribed Information to their tenant do not need to reissue the Prescribed Information to the tenant on future renewals of the AST, or if the AST rolls into a statutory periodic tenancy.

This is so long as the tenancy details haven’t changed (i.e. landlord, tenant and property information) and the deposit remains in the same tenancy deposit protection scheme."

See Paul Shamplina's article >> https://www.property118.com/what-does-the-deregulation-act-2015-mean-for-landlords/

I am not however, sure what happens in this instance where subsequently there is a new landlord and new tenancy agreement, but the tenant is the same and no new deposit has been given.

Chris Daniel

2 months ago

De-Regulation Act 2015 said that Landlords had 90 days to protect any deposit taken pre 2007, by 23 June 2015.
Get professional Possession assistance - http://www.PossessionFriend.uk

John Frith

2 months ago

I'm not an expert, but if it was me, I would first establish if there were proof that there was no contract between myself and the tenant. Do you still have a copy of the contract between yourself and LHS? Failing that, can you get a copy of the tenant's contract, which will presumably state LHS as the landlord? If there is no contract between you and the tenant, why would you be responsible for the deposit?

I may be wrong, in which case I'd like to understand why.

Kate Mellor

2 months ago

Whilst on the face of it this would seem clear cut. You weren’t the landlord and therefore weren’t responsible for the deposit. However, I hesitate because I believe Rent to Rent can be a complex area contractually & it may be that an expert needs to read the contractual terms you had with your tenant at the time...

It would be good to hear the opinions of those who have experience in this area.


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