Tenant Deposit Error
Discussion
I did not protect my tenants deposit. Completely my error!
The tenant left leaving £1500 in costs and damages. I partially returned their deposit and gave them a breakdown of deductions.
Rightly so they asked for their deposit certificate.
I have now refunded their balance of their deposit so they have 100pc of theu deposit back.
My issue is as following;
1. Do the tenants still have rights to claim up to 3 times their deposit as compensation for my cock up
2. Do I take them through a small claims to recover costs and more importantly enforcd a CCJ against them so they can't rent in the future or take such an approach with another landlord.
BTW I don't make any money from the property so the £1500 costs comes straight out of my pocket.
I appreciate i messed up. Next steps forward would be appreciated
The tenant left leaving £1500 in costs and damages. I partially returned their deposit and gave them a breakdown of deductions.
Rightly so they asked for their deposit certificate.
I have now refunded their balance of their deposit so they have 100pc of theu deposit back.
My issue is as following;
1. Do the tenants still have rights to claim up to 3 times their deposit as compensation for my cock up
2. Do I take them through a small claims to recover costs and more importantly enforcd a CCJ against them so they can't rent in the future or take such an approach with another landlord.
BTW I don't make any money from the property so the £1500 costs comes straight out of my pocket.
I appreciate i messed up. Next steps forward would be appreciated
200Plus Club said:
Just walk away thankful.
Nothing you can do will resolve it further unless you want to waste more money against them for nothing.
Also make sure you do everything right next time, use this as a learning curve.
This.Nothing you can do will resolve it further unless you want to waste more money against them for nothing.
Also make sure you do everything right next time, use this as a learning curve.
If you go after the, they can go after you for not doing it properly.
If you gave them a partial deposit back, and when challenged for the deposit certificate gave them the rest, would they not assume that there is a good chance you have something to hide - and go after the 3x anyway?
No experience in this but if I were a tenant and suddenly my “deposit deductions” were cancelled and I still had not been given a certificate I know what I’d be thinking.
No experience in this but if I were a tenant and suddenly my “deposit deductions” were cancelled and I still had not been given a certificate I know what I’d be thinking.
Sounds like both parties are in the wrong here - your tenants were dicks for causing that amount of damage, but if you're going to be a decent landlord rather than just playing at being one, you really need to learn about all parties' rights and responsibilities and do things properly. Protecting a tenant's deposit isn't a radical new thing, it's basic stuff. Learn and move on.
GranpaB said:
How come you don't make any money from the property?
Its a London property with a 4.5pc gross return. Mortgage is 1250pm and rent is 1400pm. Deduct insurance costs of £600, maintenance and breakdown insurance £400 plus agent fees of £900 its running at a small loss. Add on renovations costs whenever tenants leave then that's another 2k. On average tenants leave after 18 months.I'm selling the property soon. I'm done with renting out in London.
doesthiswork said:
Sounds like both parties are in the wrong here - your tenants were dicks for causing that amount of damage, but if you're going to be a decent landlord rather than just playing at being one, you really need to learn about all parties' rights and responsibilities and do things properly. Protecting a tenant's deposit isn't a radical new thing, it's basic stuff. Learn and move on.
Yes, normally the agents do their for me. I just screwed up and put all the advance rent and deposit into a separate account. As I said clearly I'm totally at fault.Cimaguy said:
Its a London property with a 4.5pc gross return. Mortgage is 1250pm and rent is 1400pm. Deduct insurance costs of £600, maintenance and breakdown insurance £400 plus agent fees of £900 its running at a small loss. Add on renovations costs whenever tenants leave then that's another 2k. On average tenants leave after 18 months.
I'm selling the property soon. I'm done with renting out in London.
So they’re paying your mortgage for you. Some (me for one) would see that as making money…I'm selling the property soon. I'm done with renting out in London.
Oceanrower said:
Cimaguy said:
Its a London property with a 4.5pc gross return. Mortgage is 1250pm and rent is 1400pm. Deduct insurance costs of £600, maintenance and breakdown insurance £400 plus agent fees of £900 its running at a small loss. Add on renovations costs whenever tenants leave then that's another 2k. On average tenants leave after 18 months.
I'm selling the property soon. I'm done with renting out in London.
So they’re paying your mortgage for you. Some (me for one) would see that as making money…I'm selling the property soon. I'm done with renting out in London.
4.5% gross return is not enough to make any money on a BTL IMO. If you are a high rate taxpayer you could operate at a loss and still owe tax due to the unique way private landlords are taxed.
Edited by 98elise on Sunday 9th October 14:38
GranpaB said:
I was always under the assumption that the property had to provide a particular percentage over the monthly payment amount?
It depends when the mortgage was taken out, and how it was financed.As an example I bought a BTL's by refinancing my home. As far as the mortgage co is concerned its a home loan, so they don't care what the BTL generates.
These days if it's a straight up loan against the property in question then it's 125% of the loan interest.
98elise said:
Almost all BTL mortgages are interest only, so nothing is being gained on the mortgage.
4.5% gross return is not enough to make any money on a BTL IMO. If you are a high rate taxpayer you could operate at a loss and still owe tax due to the unique way private landlords are taxed.
To be fair there should be a shedload of capital growth in there as well.4.5% gross return is not enough to make any money on a BTL IMO. If you are a high rate taxpayer you could operate at a loss and still owe tax due to the unique way private landlords are taxed.
Edited by 98elise on Sunday 9th October 14:38
OP - which area of London are you in? £1400pm seems cheap for an entire house if it's anywhere near the centre. My youngest is sharing with 3 Uni mates and they're paying £600 per week for a 3 bed maisonette in Camden (downstairs lounge being used as the 4th bedroom). My nephew is also flat sharing and paying £1,200 per month in Zone 2 I believe.
Countdown said:
Apologies for thread hijack -
A mate of mine down the pub says he gets around the TDS by simply asking for 3 months rent in advance instead of asking for a "deposit". As its not a deposit he's asking for he doesn't need to put it in the TDS.
Is this legal?
Legal but I don't see how it helps him? A tenant won't hand over three months rent in advance then pay monthly once they've moved in, they'd either have the first three months of not paying rent or maybe not pay the two months at the start and then not pay the final month. A mate of mine down the pub says he gets around the TDS by simply asking for 3 months rent in advance instead of asking for a "deposit". As its not a deposit he's asking for he doesn't need to put it in the TDS.
Is this legal?
Countdown said:
Apologies for thread hijack -
A mate of mine down the pub says he gets around the TDS by simply asking for 3 months rent in advance instead of asking for a "deposit". As its not a deposit he's asking for he doesn't need to put it in the TDS.
Is this legal?
A quick google suggests maybe/maybe not depending on exact circumstances...A mate of mine down the pub says he gets around the TDS by simply asking for 3 months rent in advance instead of asking for a "deposit". As its not a deposit he's asking for he doesn't need to put it in the TDS.
Is this legal?
https://www.landlordzone.co.uk/information/case-la...
doesthiswork said:
Legal but I don't see how it helps him? A tenant won't hand over three months rent in advance then pay monthly once they've moved in, they'd either have the first three months of not paying rent or maybe not pay the two months at the start and then not pay the final month.
No. It's 3 months in advance and then paying monthly (so they're always effectively 3 months in advance)Looks like it's a common scam
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff