Tenant disappeared with arrears and can’t get deposit?

by Readers Question

8:43 AM, 30th January 2018
About 9 months ago

Tenant disappeared with arrears and can’t get deposit?

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Tenant disappeared with arrears and can’t get deposit?

We have had a tenant vacate a property unexpected. Verbally over the phone the tenant has told us he has left and the deposit (£600) will cover the rent arrears of (£500) plus the damages to the property they had left.

When we finally got possession of the house back the estate agent who did the tenant find and organised the AST is saying that without written consent they can not release the deposit back to us and we must take the tenant to court.

Has anybody come across this before?

As far as I can see the well known high street agent is sat on the £600 – the tenant has vanished leaving behind a lot of mess knowing he owes the final months rent so unsurprisingly his phone no longer works.

I am reluctant to try and take the tenant to court as I have no idea how to take somebody to court who I have no forwarding address or phone number for…. Surely I am not the first person to have a disappearing tenant and an Agent refusing to release the deposit or even let us dispute the deposit…..Any advice welcome!

James



Comments

Neil Patterson

8:54 AM, 30th January 2018
About 9 months ago

Hi James,

From the DPS FAQ section >> https://www.depositprotection.com/help/browse/custodial/agent-landlord/alternative-dispute-resolution

"What happens if one party does not agree to use the ADR service?

The ADR service can only be used where both parties agree to resolve the dispute through it and be bound by the adjudicators decision.

When requesting repayment online, the agent/landlord will be given three opportunities to claim an amount. If agreement to ADR is not given by the third claim, the deposit will be locked and both parties will only be able to update their ADR preference online or by contacting disputes@depositprotection.com

If one does not wish to use the ADR service, then resolution of the dispute will have to be taken through the County Courts or resolved by way of an agreement. In the event that Court action is being taken, please see our FAQ 'The dispute is being dealt with through the County Court; what information is required to release the deposit?’.

We will hold the deposit until a court order is received or agreement by both parties is received indicating a resolution to the dispute.

The dispute is being dealt with through the County Court; what information does The DPS require to release the deposit?

If the deposit is disputed between the Landlord/Agent and the tenant(s), there is usually no need for The DPS to be a named party to the County Court action. This is because The DPS is the custodian for the deposit and simply holds the monies on behalf of the Landlord/Agent and the tenant(s).

The successful party should make sure that the Court makes an order which refers to the amount of the Deposit, who it should be released to and ordering The DPS itself as the scheme administrator to release those monies. It is not sufficient to obtain an order for rent arrears or for possession for the property only.

In the event that the final Court Order does not comply with the above, the successful party may apply to the Court for a Third Party Debt Order, which could direct The DPS to pay part or all of the deposit to them. Please be aware if The DPS is listed as a party we will make an application to the Court to change the parties to the Court action to represent Landlord/Agent and Tenant(s).

If you still have a question on this matter please contact us using our Online Form"

Steve Masters

11:25 AM, 30th January 2018
About 9 months ago

This is the very reason I don't use a custodial scheme, I prefer an insurance backed scheme where I hold the money.

If a tenant does a runner then it is they who need to attempt to claim back the deposit not the landlord. Nine times out of ten they wont bother if they know they have left arrears and damage.

Sorry James that this is not the answer you are looking for this time around.

Kate Mellor

11:38 AM, 30th January 2018
About 9 months ago

Ask the agent for a copy of their deposit Ts & Cs. I presume they are holding the deposit using an insured scheme as opposed to the deposit being physically deposited with a scheme? I self manage and use the DPS. They have a single claimant process for just this occasion whereby a landlord (or for that matter a tenant) can make a claim in the usual way, but if after 14 days the tenant hasn’t responded you can request a single claim form which needs to be filled in and witnessed by a solicitor and sent in. The DPS then attempts to contact the tenant again and if there is no response after a further 14 days they will pay out the claim to the landlord. It sounds as though the agent is advising that they can’t be sure the tenancy has in fact ended as no written notice has been given, however this should not prevent you making a claim on the deposit if arrears are indeed owed. The deposit can be claimed at any time even mid tenancy. You should provide evidence of any invoices or quotes for repairs to justify your claim and the agent should attempt to contact the tenant to obtain their agreement, but they should have a policy to deal with a tenant being unresponsive. As has been mentioned if the agents policy is unacceptable you should contact the Scheme used by the agent to begin the ADR process as this is a free process and they should decide in your favour if you can provide evidence that the money is genuinely owed to you by the tenant. You shouldn’t need to go to court to have this decided.

Claire Bartley

11:39 AM, 30th January 2018
About 9 months ago

Reply to the comment left by Steve Masters at 30/01/2018 - 11:25
Which insurance backed scheme do you use Steve?

Gunga Din

13:01 PM, 30th January 2018
About 9 months ago

Like Kate Mellor I self manage and use the DPS (custodial). I have twice used the procedure for an unresponsive tenant which she describes, both times successfully.

Brian Jackson

13:21 PM, 30th January 2018
About 9 months ago

Hi

This is the very reason I don't take deposits.
Its worked for me for the last 10years.

Sue Marven

16:24 PM, 30th January 2018
About 9 months ago

Reply to the comment left by Kate Mellor at 30/01/2018 - 11:38
the DPS custodial scheme works as Kate says above but only if the tenant agrees. I had a tenant decide she didn't agree about the arrears despite me producing a statement clearly showing the payments. I now have to take her to court. I don't like the insurance scheme as I need to pay every time I renew a tenancy and I don't want the money in my account. In over 8 years this is the first problem I have had. Good luck

Highland Lass McG

12:25 PM, 1st February 2018
About 9 months ago

Reply to the comment left by Brian Jackson at 30/01/2018 - 13:21
Brian, I would love to not take deposits because of all the traps you could fall into. However, if rent is not paid on the due date and there is no deposit to fall back on, you risk losing 2 or 3 months rent because of the notice period you have to give. Is that just a chance you have to take? I understand you cannot take the 'last month's rent' at the start of the tenancy in lieu of deposit, which would have been ideal.

Luke P

12:38 PM, 1st February 2018
About 9 months ago

Reply to the comment left by Highland Lass McG at 01/02/2018 - 12:25
Use a homeowner guarantor and familiarise yourself with MCOL. I very rarely do't get paid every penny I'm due...

Brian Jackson

16:12 PM, 1st February 2018
About 9 months ago

Reply to the comment left by Highland Lass McG at 01/02/2018 - 12:25
Hi Highland lass

Once a AST is issued for 6 months any tenant could renege on paying the remaining 5 months. Like I said NO Deposit I have many many prospective tenants wanting to rent from me.(over 50 for one house) this gives me a huge selection to choose from,naturally I pick the best prospect. Like Luke P says look up MCOL and no rent a CCj and attachment of earnings order.
For me it is very rare and only happens when couples split.
Good Luck

Brian.

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