Should tenant be evicted but accept possible Tenancy Deposit penalty?

by Readers Question

12:10 PM, 5th December 2014
About 4 years ago

Should tenant be evicted but accept possible Tenancy Deposit penalty?

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Should tenant be evicted but accept possible Tenancy Deposit penalty?

I have a friend who has let her property for 10 years to a tenant who has now not paid the rent for over 6 months. My friend is worried about issuing the tenant with an eviction notice as the tenant’s deposit was never paid into a deposit scheme when it was introduced.

My friend is desperate to evict her tenant for non payment of rent but is worried about the deposit issue. What would you advise?

Thanks

Amandaweighing



Comments

Neil Patterson

12:13 PM, 5th December 2014
About 4 years ago

Hi Amanda,

I think this comes down to simple Maths.

The maximum penalty for not protecting a deposit is 3 times the deposit plus the deposit.

Therefore is what your friend has lost already and will likely to continue to lose more than 4 times the deposit. If the tenant is aware of this situation it is likely to only get worse and be worth considering a possible penalty.

Romain Garcin

13:30 PM, 5th December 2014
About 4 years ago

When was the latest tenancy created?

If it was before 2007 then he should be fine.

Mark Alexander

14:05 PM, 5th December 2014
About 4 years ago

Evict using a secion 8 notice, there is no defence available if the tenant is more than two monthly payments in arrears.

The potential for the tenant to claim compensation for non-compliance with deposit protection legislation exists for up to six years whether your friend evicts or not. In my opinion she should cut her losses and evict NOW!

I do recommend professional assistance though, see >>> http://www.property118.com/tenant-eviction/
.

Amanda Stevens

17:05 PM, 5th December 2014
About 4 years ago

Hi Romain, the tenancy was created 10 years ago so before 2007

Thanks

Joanne Wilson

17:13 PM, 5th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "05/12/2014 - 13:30":

There was another little known law that came out in 2012. All deposits have to be registered now whether the tenancy started before April 2007 or not

Romain Garcin

17:21 PM, 5th December 2014
About 4 years ago

Reply to the comment left by "Joanne Wilson" at "05/12/2014 - 17:13":

Coincidently, that's a question I put to Tessa Shepperson no later than this week (though it has been debated on a few forums since 2012) and her opinion is that tenancy that started before 2007 are still immune to tenancy deposit regulations.

However, the Deregulation Bill will apparently change that when/if it becomes law.

Amanda Stevens

17:29 PM, 5th December 2014
About 4 years ago

Thanks Joanne & Romaine. That's the bit I wasn't sure about - whether the rules applied to a tenancy taken out prior to 2007

Joanne Wilson

20:19 PM, 5th December 2014
About 4 years ago

Depositing the deposit late will not protect the landlord or allow a section 21 notice to be served. Section 215A as amended by Localism Act stipulates that the only way a landlord can rectify the position (rectify insofar as being able to serve a section 21, it will not protect a landlord for a claim of to three times the value of the deposit) is to give the deposit back to the tenant, or with the tenant's permission, deduct the deposit (say against arrears for example).

Mike

22:12 PM, 5th December 2014
About 4 years ago

I would do as Joanne says, I was in a similar situation, and realised after learning about the repercussions of not protecting a deposit, of older tenancies, so one day my tenant phoned me to say that he was having some problems and will pay his rent 1 week late, so i took this opportunity and told him not to worry if he is in some short term financial difficulties, I offered him some his deposit back to pay that month's rent to me, as I told him that I trust him as he has been a good tenant, so I need not hold any deposit against him, so offered it back and amended the agreement stating clearly that No deposit had been taken, and hopefully this will not stand in my way if it came to serve him S21 in future.

You could ask your friend to find out why the tenant is not paying his rent, e.g. is he in financial difficulties, if so she can pretend to offer him some help by returning his deposit to overcome short term financial difficulty her tenant may be in, he might jump at this opportunity, and take his deposit back, and as long as he signs an agreement backdating to the begining of the latest term of his tenancy, as then if she wants to serve him a S21, she won'tr have to wait for 6 months if she had signed a new agreement.
It is quite possible that her tenant may be facing some genuine difficulty and is not trying to exploit the deposit protection as an excuse to rip her after staying in for 10 years!

DC

22:19 PM, 5th December 2014
About 4 years ago

Reply to the comment left by "Romain " at "05/12/2014 - 17:21":

How would this situation differ from that of SUPERSTRIKE LTD vs MARINO RODRIGUES, assuming at some stage after 6th April 2007 the tenancy reverted to a statutory period tenancy?

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