Latest News

Am I still liable for deposit returns when I buy a property with sitting tenants?

The RLA’s Landlord Advice Team is on hand to offer free unlimited advice to members. Each week, we are featuring a call from one of members outlining their problems and how the team helped them.
This week the call concerns a landlord who had bought a block of flats with sitting tenants – without checking whether their deposits had been properly protected.

The RLA’s Landlord Advice Team is on hand to offer free unlimited advice to members. Each week, we are featuring a call from one of members outlining their problems and how the team helped them.

This week the call concerns a landlord who had bought a block of flats with sitting tenants – without checking whether their deposits had been properly protected.

The RLA member called the Landlord Advice Team having just completed on the sale on a block of 10 flats, and asked the call handler who was liable for the return of the deposits to the tenants at the end of the tenancy agreement.

In this instance we told him that he – as the new owner of the block – would be liable for the return of all the deposits, which amounted to a total of £20,000.

The member had completed on the sale with no information about each of the £2,000 individual deposits or which scheme they were protected with. That is if they were protected at all.

Our call handler advised the member to go back to his solicitor as a matter of urgency to get this information and to get the deposits transferred over as part of the sale.

They pointed out that if the previous agents had not protected the deposits correctly, or served the relevant paperwork, then he (the new owner) could face a fine of up to three times the deposit – on each of the flats. For this landlord this would have added up to a massive £60,000 if all 10 tenants sued him.

He took the team’s advice – and the situation was resolved satisfactorily – with no cost to the landlord.

Rupinder Aujla, Landlord Advice Team manager said: “This is a very common error that many landlords are making when buying properties with sitting tenants and agreements and deposits in situ.

“Our advice is do not complete on any sale, until all the documentation has been seen and deposits transferred over to the new landlord.”

rlaonlinetraining

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Media and Communications Officer for the RLA. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

2 Comments

Leave a Comment