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How To Claim Compensation For Tenancy Deposit? – Claims Guide For Tenancy Deposit Scheme Dispute

How To Claim Compensation For Tenancy Deposit? – Claims Guide For Tenancy Deposit Scheme Dispute

October 24, 2019 9:48 pm3 comments
Tenancy Deposit Compensation Guide Tenancy Deposit Compensation Guide

 

You may be able to file a tenancy deposit compensation claim against your landlord should you have paid either a former or current landlord a deposit in the last 6 years and the landlord involved did not return it to you.

If a landlord fails to return the whole amount or part of the rental deposit back to you without having a good reason for doing so, you should seek advice from a legal expert on how best to pursue your claim.

What Are Tenancy Deposit Schemes

Tenancy deposit schemes are backed by the Government and in England and Wales, a landlord should pay the money paid as a deposit into one of three approved protection schemes. With this said there are different rules that govern tenancy deposits in Northern Ireland and Scotland. Should you have an assured tenancy agreement with a landlord and the date of your contract began after 6th April 2007, the tenancy deposit that you paid your landlord should normally be “protected”.

What Steps Does My Landlord Have to Take to Protect My Deposit?

When you pay a tenancy deposit to your landlord, they must do the following:

  • Pay the tenancy deposit into an approved government backed protection scheme of which there are three
  • Inform you which of the three schemes your tenancy deposit was paid into
  • Let you know how your tenancy deposit is “protected” which they should do within 30 days of you having paid it to them

Should your landlord have failed to do any of the above, you may be entitled to file a tenant deposit protection compensation claim against them. The amount you could be awarded in a successful claim could be anything up to 3 times the original amount of tenancy deposit you paid your landlord when you entered into a contract with them.

What Are the Three Approved Tenancy Deposit Schemes?

As previously mentioned, there are 3 government approved tenancy deposit schemes which are listed below:

  • Tenancy Deposit Scheme
  • MyDeposits
  • Deposit Protection Service

Should your landlord fail to pay your tenancy deposit into one of the above schemes, they would need to set in place another method to protect your deposit which should be to take out an insurance policy which would offer the required protection. It is worth noting that the insurance cover must offer “protection” for your entire tenancy agreement.

Does My Landlord Have to Tell Me How My Tenancy Deposited is Protected?

Your landlord must tell you how they have protected the tenancy deposit you paid them at the outset of your tenancy agreement and must do so within 30 days. The Government passed a law in 2007 obliging landlords to do this and should they fail to tell you which scheme they used to protect your deposit, it could entitle you to file a tenancy deposit protection compensation claim against them.

What Are the Rules that Govern Tenancy Deposit Protection in England and Wales?

If you are planning to rent a property and your rental agreement is an assured shorthold tenancy, your landlord is legally obliged to adhere to the rules that apply to this type of tenancy agreement. As previously mentioned, the “rules” in Scotland and Northern Ireland are different to those in England and Wales where assured shorthold tenancies are commonplace.

Should you have paid your tenancy deposit to a landlord through an agency, the landlord may ask that the agency “protect” it on their behalf. Should this be the case, the agency must abide by the same rules that apply to landlords when it comes to “protecting” tenancy deposits.

Once you have paid your tenancy deposit whether it is protected by a landlord or an agency, they must inform you within 30 days of the following:

  • The amount you paid in tenancy deposit and the address of the house, flat or other type of property that is on your tenancy agreement
  • Details of the tenancy deposit protection scheme that was used and how to contact an agency or your landlord
  • Details on how the scheme that was used to protect your deposit works
  • Details on how you will receive your tenancy deposit back and the deductions that could be made which could include information on how you could make a tenant compensation claim
  • Information on what may happen should there be a dispute between you and your landlord relating to the tenancy deposit you paid at the outset of your rental agreement

The document that contains the information above must be signed by the party who received the tenancy deposit whether it is an agency or your landlord.

Tenancy Deposit Compensation Guide Tenancy Deposit Compensation Guide

How is My Tenancy Deposited Protected?

It would depend on when a tenancy agreement began and when a tenancy deposit was paid as to how it would be protected. The reason being that different rules may apply to how a deposit is protected and the time limits that could apply to how long it would be “protected”.

As of 2007 when the Government bought into effect its legislation, tenancy deposits should be protected by being placed in one of the three government approved schemes. A landlord may opt to have an insurance policy in place to protect a tenancy deposit, or they may request that an agency do this on their behalf which they are entitled to do.

Your landlord or the agency must inform you within 30 days of you having paid them a tenancy deposit, how it is being “protected”. If they fail to do so, they could be in breach of the regulations and as such, you could be entitled to file a tenancy deposit compensation claim against them.

What Are the Time Limits For Tenancy Deposits Paid Before April 6, 2012?

The time limits for tenancy deposits paid before 6th April 2013 differ as follows:

  • If the deposit was paid between 6th April 2007 and 5th April 2012, it would be protected till 6th May 2012
  • If the deposit was paid before 6th April 2007, it would not have to be protected but should you have been served with a “section 21” notice, a deposit has to be returned
  • If a tenancy is renewed between 6th April 2007 and 5th April 2012, the deposit would be protected till 6th May 2012
  • For fixed term assured tenancies (shorthold) that ended any time after April 2007, the deposit would be protected until 23rd June 2015
  • For tenancies that were renewed on or after 6th April 2012, the deposit would be protected for 30 days

Are There Any Exceptions that Apply To Tenancy Deposits Protection Rules?

There are certain instances where a tenancy deposit does not need to be protected and placed in one of the three schemes which are as follows:

  • If you lodge in the same property as a landlord which includes renting a room in a flat or house
  • If you rent accommodation in a hall of residence. An example being as a student on a university campus
  • If your tenancy is “assured” or which comes under a pre-January 1989 tenancy agreement that is regulated

However, you may still be able to pursue a landlord through the courts if they failed to protect the deposit you paid them. The reason being that although a landlord may not be obliged to use a government approved Scheme, they should choose some way of protecting a tenancy deposit anyway.

When and How Should Tenancy Deposits be Returned?

Providing you paid your rent on time and took care of the property you were renting by not causing any damage, a landlord should pay back the full amount of deposit you paid them at the outset of your tenancy. Should the deposit not be returned to you in 10 days of your tenancy ending, your landlord runs the risk of being seen as “withholding” your tenancy deposit and as such, you may be entitled to file a claim against them, bearing in mind that should you win your case, it could mean that you are awarded anything up to 3 times the original amount that you paid when you took on the tenancy.

Can I File a Tenancy Deposit Dispute Claim if a Landlord Makes Unreasonable Deductions?

If you believe that your landlord has made “unreasonable deductions” from your tenancy deposit, you could be entitled to file a claim against them. The reason being that by law any deductions that a landlord makes must be supported by evidence that they suffered a financial loss. This could include the following:

  • Rent arrears
  • Damage to property
  • Items missing from the property inventory
  • Unexpected cleaning costs

Your landlord may not deduct normal wear and tear on the property from your tenancy deposit which would be deemed as “unreasonable”. This could include the following:

  • Normal wear and tear of a carpet
  • Any repairs to the property that should have been done during your tenancy

Can I Claim If a Landlord Paid Some of the Deposit Back?

Your landlord would have to show good reason for making deductions from your tenancy deposit. Should they only give back some of it, and you believe this to be unfair, you should discuss your case with a solicitor who specialises in tenancy deposit claims. The reason being that you may be able to prove that the deductions that were made were “unreasonable”.

What Kind of Evidence is Needed to Support a Deposit Compensation Claim?

The evidence that you would need to provide if you want compensation from a landlord who either did not respect the rules that apply to protecting tenancy deposits or who did not return a deposit, is as follows:

  • Tenancy agreement
  • Proof that you paid a deposit and to whom it was paid whether it was a landlord or an agency
  • Any correspondence you may have had with a landlord relating to your tenancy deposit
  • Proof that you paid your rent throughout your tenancy
  • Proof that you searched deposit protection agencies online

How Much Tenancy Deposit Compensation Would I Get?

As previously touched upon, if a landlord does not return the full amount of your deposit at the end of your tenancy or they keep part of it without giving good reason, you could file a claim for compensation against them. With this said, if your case succeeds, you could be awarded up to three time the amount of your original tenancy deposit.

Do I Have to Tell My Landlord That I Am Making a Deposit Compensation Claim?

You would need to send your landlord a formal letter informing them of your intention to make a deposit compensation claim against them which is referred to as a “letter before action”. If you are unsure on how to go about doing this, you should contact a legal expert who would be happy to do this on your behalf.

The formal letter needs to contain the following information:

  • The details of the tenancy deposit compensation claim

If your landlord failed to “protect” your tenancy deposit, you could be entitled to file a court action against them too and the same applies if they only gave you back some of the deposit having made “unreasonable” deductions. It is worth noting that the majority of landlords choose to give back a deposit to avoid having to go to court which could mean they have to meet costly legal fees too.

Do I Have to Go to Court If I Make a Deposit Compensation Claim?

As previously mentioned, most landlords prefer to give back tenancy deposits they withhold because they want to avoid court action and the legal costs this could entail. If your landlord makes you an out of court settlement, you should ask for legal advice from a solicitor before accepting it.

What Would Happen if My Landlord Wants to Take My Deposit Compensation Claim to Court?

When a landlord wants to dispute a tenancy deposit compensation claim and therefore wants the case to go to court, it is far better to have legal representation. A legal expert would prepare your case and they would ensure that you have all the required evidence to support your claim against your landlord.

A judge would listen to both sides and may ask questions if needed before they come to a ruling. Should a judge decide in your favour, they would then establish how much tenancy deposit compensation your landlord would have to pay you. If it is found that a landlord failed to “protect” your tenancy deposit, the judge may fine them for having breached the regulations.

Useful Links

If you are having trouble with a landlord who is not willing to return your tenancy deposit and you would like more information on the rules that apply to deposit protection, please follow the link provided below:

The rules that apply to tenancy deposit protection

To find out more about assured tenancy agreements, please click on the link below:

Assured tenancy agreements explained

To learn more about tenancy deposit protection schemes, please follow the link provided below:

 

Tenancy Deposit Compensation Guide Tenancy Deposit Compensation Guide