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Call of the week – Protect your deposit or face the consequences

Call of the week
Landlord Advice
Written by Landlord Advice

The RLA’s Landlord Advice Team is on hand to offer free unlimited advice to members. Now, 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 deposit protection – one of the hot topics for the advice team.

The landlord who called us this week has a four bedroomed house and rents out each room to adults on a room only basis.

He gave a six month, room only, Assured Shorthold Tenancy (AST) to female tenant and also took a deposit that was protected with a deposit scheme. So far, so good.

After the fixed period ran out no further contract was signed and it continued on a rolling periodic basis.

Two years later the female tenant asked to move a male friend to the room and to have a new joint AST – to which the landlord agreed.

He gave new agreement to both, closed and re-protected the deposit scheme – but – crucially in this case – only in name of the female tenant, because it was she who paid the original deposit.

The female tenant later left the property and moved abroad whilst the male tenant stayed on.

The woman did not give written notice and did not return the keys. The landlord decided to keep the deposit to cover her notice period and arrears. He closed the deposit protection and kept the money to cover his expenses whilst the male tenant remained at the property.

The landlord now wants to evict the male tenant and contacted the Landlord Advice Team.

The team had to explain that the deposit SHOULD NOT have been protected only in the woman’s name and the deposit SHOULD NOT have been unprotected until tenancy ended.

When landlord unprotected the deposit too early he was leaving himself open to financial penalties and was also unable to serve a valid Section 21 on the remaining tenant.

To rectify the error the landlord would need to return the money to the woman, to reinstate his ability to serve a Section 21. However she has left the property and moved abroad without leaving a forwarding address.

He is now unable to use the Section 21 route for possession and his only route is to serve a Section 8 notice.

However, as there are issues relating the protection of the deposit, the judge may use his discretion to fine the landlord for failing to protect it correctly.

If the remaining outstanding rent arrears fall below the eight week rent arrears threshold the landlord cannot rely on Section 8 – reducing his changes for a straightforward possession case.

Rupinder Aujla, Landlord Advice Team manager said: “If the deposit has not  been protected correctly  the judge could throw out the possession order under a Section 8 rent arrears notice as the penalty the tenant  is entitled to is up to three times  the deposit.

“The landlord is seeking possession for rent arrears but is in debt to the tenant at the same time.

“Our Advice on a Section 8 rent arrears or Section 21 notice – is always to ensure the deposit has been protected correctly at the outset. If it hasn’t, return the deposit and then serve the correct notice. If a tenant has agreed to offset the rent arrears against an unprotected deposit ensure there is evidence of this for the courts.

“Always protect a deposit within 30 days of receipt.”

The Landlord Advice Team can be contacted on 03330 142998 or online via the RLA website.

About the author

Landlord Advice

Landlord Advice

On-demand phone support from our landlord advisors is a big feature of RLA membership and is seen by many of our members as the most important service we offer. You can call the team in total confidence and be assured that the advice you'll receive is friendly, pertinent, up-to-date and practical.

Access to the advice team is FREE for all RLA Members.

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