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Will My Tenant's Deposit be Returned?

By: Louise Smith, barrister - Updated: 9 May 2017 | comments*Discuss
 
Deposit Tenancy Tenant Landlord

Q.

I am currently a tennant, on a fixed term contract for 12 months. This is nearly due to end. Recently we had a letter stating that our landlord has gone into arrears on the mortgage and the house was therefore being repossessed.

I have paid the agreed rent (that was confirmed in the tennants agreement) every month. I am currently renting through an agency, who deal with the landlord directly.

My questions is whether or not I will receive my deposit I paid at the beginning of the tenancy?

(Miss SS, 17 September 2008)

A.

From your question I am assuming that you entered into your tenancy after 6 April 2007. Since that date all deposits paid to a private landlord renting a property under an assured short hold tenancy have to be protected under a tenancy deposit scheme. As long as you have the whole house to yourself and pay no more than £25,000 a year in rent you almost certainly have an assured short hold tenancy.

There is a choice of government approved deposit schemes that landlords can use to protect deposits. You should have received information regarding the scheme used by your landlord within 14 days of the beginning of the tenancy. If landlords fail to comply with this requirement tenants can apply for a county court order forcing the landlord to provide the information or otherwise to compensate the tenant. If you are not sure what happened to your deposit you could start by asking the letting agency.

The purpose of a deposit is to protect the landlord from financial loss if a tenant causes damage to the property or fails to pay the rent. You say that you are up to date with the rent therefore that should not be an issue.

If there is a dispute between a landlord and a tenant about the amount of the deposit to be repaid, the tenancy deposit scheme holding the deposit will provide a dispute resolution service to help the parties reach an agreement. If this does not work, or if either party refuses to use the service, the dispute will have to be resolved in the county court – probably as a small claims case. If there is agreement between the landlord and the tenant, the deposit should be repaid within 10 days of the tenancy ending.

You are right to be concerned that your home may be at risk because your landlord is in arrears with his mortgage. If your tenancy started after the mortgage and /or the mortgage company did not give consent to the property being let you have very few rights. Technically you have no right to know the details of your landlord’s mortgage – beyond the letter you received informing you that possession proceedings have been started.

If you go to court on the day of the possession hearing the judge may allow you to explain your position. However, in legal terms what you say will probably have little bearing on the order the judge makes. It would certainly make sense to start looking for alternative accommodation now rather than once a possession order has been made. Sadly the problem of landlords taking rent from tenants but failing to pay their mortgage is not uncommon. An increasing number of buy-to-let mortgages are falling into arrears leaving tenants, who have paid the rent in good faith, in a desperate situation though no fault of their own.

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Browny - Your Question:
Hi. I have been contacted by an heir hunter type company about a home I owned for a short while. I bought a flat for about £62k in 2000 I was skint, in a bad relationship and a bit young and daft yadda yada. Irresponsible what I did and looking back I am a bit embarrassed by it all. My relationship split up, I lost my job and basically in 2003 I just bolted and left it all behind. Absentee when all this later happened. Clearly eventually it was repossessed and sold off. No idea of details and don't really care. No one died and the bank got back what they had- though I had paid quite a big deposit probably 15k at the time. I managed to completely wipe it out of my memory, moved on, I now have a great partnership and career and live in my partners (now our) home. The flat a distant memory until last week when a company contacted me the upshot being they will do all the paperwork and retrieve any lost equity as they have me on a register as being owed money- the flat probably did make a profit it was in an okay development and the prices did go up year on year by 5k- it was that crazy time when cheap flats suddenly rocketed in price. So question is:1. do I trust this company who want 25% of anything they get back2. can I do this for myself and I so how in terms of the absenteeism and having no docs etc3. is there anything nasty lurking here i.e. old debts coming haunting meFrom what they said the flat was sold on in 2006 and the value may have been about 95k by then judging by stats online.Thanks for any advice I know its a strange one.

Our Response:
We can't really advise on this. Try and do some research on the heir hunting company, e.g see if other people have used them etc. If you still have details for your lender, you could try contacting them directly.
HousingRepossessions - 10-May-17 @ 2:21 PM
Hi. I have been contacted by an heir hunter type company about a home I owned for a short while. I bought a flat for about £62k in 2000 I was skint, in a bad relationship and a bit young and daft yadda yada. Irresponsible what I did and looking back I am a bit embarrassed by it all. My relationship split up, I lost my job and basically in 2003 I just bolted and left it all behind. Absentee when all this later happened. Clearly eventually it was repossessed and sold off. No idea of details and don't really care. No one died and the bank got back what they had- though I had paid quite a big deposit probably 15k at the time.I managed to completely wipe it out of my memory, moved on, I now have a great partnership and career and live in my partners (now our) home. The flat a distant memory until last week when a company contacted me the upshot being they will do all the paperwork and retrieve any lost equity as they have me on a register as being owed money- the flat probably did make a profit it was in an okay development and the prices did go up year on year by 5k- it was that crazy time when cheap flats suddenly rocketed in price. So question is: 1. do i trust this company who want 25% of anything they get back 2. can i do this for myself and i so how in terms of the absenteeism and having no docs etc 3. is there anything nasty lurking here i.e. old debts coming haunting me From what they said the flat was sold on in 2006 and the value may have been about 95k by then judging by stats online. Thanks for any advice I know its a strange one.
Browny - 9-May-17 @ 8:30 PM
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