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Question

Deposits and Tenancy Deposit Schemes (England)

Section 21

10 May 2018 | 1 comment

Hi A section 21 was served on our tenant and they moved out within the allotted time . There was a negotiated settlement re the deposit which neither side was happy about but accepted . The tenant has now issued the following email
“This is to inform you that we will be taking action in a small claims court for the remainder of our deposit. I have received confirmation from the dps of the date that our deposit was protected. It was protected on 10th Feb 2015 outside of the 30 days that a deposit should be protected. Therefore that would have meant that not only was the Section 21 invalid as the full deposit should have been returned before a Section 21 was issued but also that we can claim up to 3x the amount of that deposit because you failed in your responsibility to protect it within the legal time frame.”

The tenant is correct the deposit was lodged on day 31 . Do we have any defence on this if it goes to court 1/ against the return of the deposit in full or 2/ potential claim against the 3 months deposit they state

Answer

1 Comment

  1. guildy

    Yes, they would have a claim for the return of the full deposit plus the penalty of up to 3 x deposit.

    However, in respect of the return of the full deposit, you can still offset the deductions you’ve already agreed so you would end up in the same position.

    However, the court has to by law order a penalty of at least 1 x deposit and then up to 3 x at their discretion.

    Because you missed the deadline by just 1 day, in our view, you would with almost certainty get the very lowest penalty of 1 x deposit.

    You could try returning the remainder of the deposit so they’ve had the full amount back offering that as a “full and final settlement”. That we guess would be about half of the potential 1 x penalty and they may decide not to pursue further as it will be hardly worth their while.

    As a side note, bringing a small claim against you would be wrong and they would fail as they should use a part 8 claim. The down side to this though is with a part 8 claim there is no limit to costs (subject to them being reasonably incurred).

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