It turned out that my rental agents had found a heavy drinker.
As well as a penchant for hard liquor, the tenant also had a weakness for domestic violence, drugs, prostitutes, late-night parties and Ferraris.
My neighbors documented all of this and more; I even got a call during a live incident where a woman was screaming that he had a knife and was going to kill her.
My letting agent who was supposed to be managing the property actually did nothing except ask me to wait until I could give 12 months notice.
Tenancy Deposit Protection Schemes have a free alternative dispute resolution scheme
He failed to send a notice to the tenant when I asked and now the rent remains unpaid.
Finally, after a year-plus, the tenant finally moved out, leaving a trail of destruction worth over £9,000 – against a £2,300 deposit – and relations with our neighbors took a serious turn for the worse.
The letting agents refused to send my deposit claim to the escrow system on the grounds that the tenant had not returned their phone calls or emails.
It says TDS will just send the claim back. So it offers me to sign a waiver of indemnification to return the full deposit subject to exposing me if the tenant ever disputes the deposit.
Should I take a compensation approach? AW
MailOnline property expert Myra Butterworth answers: I’m sorry to hear that your experience as a landlord was not a good one.
It is important that responsible owners remain on the market. If they disappear, the supply of attractive rental properties will decrease and this could lead to higher rents for responsible tenants.
We talk to a legal expert about your case, what your options are, and what the best course of action is going forward.
Stephen Gold, former judge and author, explains: It is not uncommon for tenants to throw out the property they are renting.
This is the main reason for a landlord to collect a deposit before the tenancy starts, although there is now a legal limit on how much can be collected under the Tenancy Act 2019. This is generally equivalent to five weeks’ rent.
In the case of our surveyor, the deposit was £2,307.69 and an additional one year’s rent of £24,000 was paid in advance.
Agents are increasingly advising landlords to collect as much as possible from the down payment to beat this limit and avoid defaulting on monthly payments.
A deposit – even including 69p – had to be protected by law through one of three government-approved deposit schemes.
Here the agents dealt with protection through the Tenancy Deposit Scheme (TDS) and used the TDS facility to insure the deposit and retain it as stakeholders, which was legal.
An alternative would be to use the custodian system, which involves transferring the deposit to TDS.
The Tenant Charges Act 2019 introduced a cap on how much of a tenant’s deposit you can get
According to the description of the events surrounding our respondent, he is entitled to a security deposit due to a series of breaches of the tenancy agreement which caused him loss. In fact, the losses far exceed the deposit held.
Protection schemes have a free alternative dispute resolution scheme where there is a disagreement between the landlord and tenant about what should happen to the deposit after the tenancy ends, and TDS is no exception.
Under his scheme, there would typically be what he calls a judicial proceeding, which is similar to the more widely known arbitration.
Our surveyor appears to have been given conflicting advice by agents as to whether a TDS judgment can be imposed if the tenant does not agree to it.
The TDS rules allow this to be done where, as here, the tenant cannot confirm that he agrees to it.
As it happens, it is now too late for that, as the process should have been launched within three months of the tenant leaving. This period can be extended by TDS under extenuating circumstances such as serious illness. They are not here. There is no time limit on the custodian scheme.
Judgment against the action of the district court
In this situation, an injunction is an alternative to a lawsuit in district court, and the judge’s decision will be binding on both parties.
In general, what are the benefits? It’s faster and without a court fee. And for those who don’t like going into a courtroom or prefer to spend the day at the races, no in-person visit is required because the judge makes the decision on paper.
Steven Gold is a former judge and author
Disadvantages? The judge can only decide what should happen to the deposit and cannot deal with compensation.
The opportunity to address the judge orally is also lost – for a claim under £10,000 the case will almost certainly be treated as a small claim – and cross-examination of the tenant and any witnesses they may rely on, there must be a substantial factual dispute; and greater opportunities to challenge a judge’s decision compared to a judge’s decision if they could have gone wrong.
One caveat. Under the controversial pilot scheme, which began on 1 June 2022, some small claims at county court centers in Bedford, Luton, Guildford, Staines, Cardiff and Manchester will be decided by a judge on paper – and without even a hearing. side, or both sides, vs.
However, this will not happen if the judge deems oral argument or cross-examination necessary.
You can try to keep your business away from these centers so you don’t get stuck with a paper decision you don’t want.
My advice to our questioner would be to prefer the District Court claim to the TDS ruling if that was now available.
The court may order the agents to pay the deposit in partial satisfaction of any judgment entered in their favor.
Agents would have to be included in the process. In this situation, agents tend to sit back, not actively participating in the case and complying with the court’s decision.
In this case, the landlord says the tenant caused £9,000 worth of damage against a £2,300 security deposit
The agents made an offer. They say they will pay our interlocutor’s deposit (or most of it, as he claims), on the condition that “if the tenant makes a claim for the deposit, you accept full responsibility, including any associated costs”.
The wording could be clearer.
However, I believe the agents are looking for full compensation and want to be assured that if the tenant subsequently makes a claim against them for allegedly releasing the deposit without their consent and they are charged with costs as a result, our enquirer will pay them all that they can reimburse the tenant and their expenses.
The position of the agent in this regard is not unreasonable.
If our inquirer is willing to limit his claim to the amount of the deposit, he may consider it worthwhile to take a calculated risk and provide the requested compensation after the precise wording is clarified and the deposit is obtained from the agents.
This is what I would do even if I became a man (not go horse racing).
Providing the tenant with details of their loss, apart from the deposit, should deter them from making a fuss about releasing the deposit. Otherwise, he can sue for total damages and seek a judgment against the tenant and an order that the agent release him the deposit to satisfy the judgment.
In such a case he must first send the tenant a letter of demand, stating what he demands and why, and giving him, say, 28 days to pay, and threatening him with a county court for what he demands, with interest at 8 per cent of at the end of the lease and expenses.
I would not recommend suing someone unless you can be absolutely certain that they will have the financial ability to settle the judgment you sought in your lifetime. The tenant of our questionnaire seems to have such an ability. The bailiff would certainly find the Ferrari he drives very tasty. Let’s hope it’s not on HP.
Stephen Gold is a former judge and the author of The Return of Breaking the Law, published by Bath. For more information go to breakinglaw.co.uk