Legal Action & Security Deposits
Complaint
Mr J (the Landlord) had retained monies relating to advanced rent following the end of the tenancy. As a result the tenants took him to Court where the judge ruled in their favour. During this process Mr J incurred legal costs in excess of £30,000 and, following the judgement, he raised 39 different complaints against the Agent which he considered had contributed to a proportion of those costs arising. The core issue was Mr J’s assertion that
the Agent’s failure to provide all of the prescribed information concerning the deposit to the tenants at the start of the tenancy, had resulted in legal action being taken and his subsequent loss of the Court case.
Investigation
Mr J had sent a number of Court papers to the Agent, which included his witness statement. From this witness statement it was apparent that Mr J had instructed the Agent on an ‘Introduction Only’ basis and that, despite the tenancy remaining in place for over a year and the legal action between him and the tenants taking place during the subsequent year,
Mr J had not raised any formal complaint against the Agent until such times as he had lost the Court case. Whilst this delay prevented a number of issues from being investigated (as they fell outside the prescribed time limit in my Terms of Reference), it was clear that the Agent had failed to provide full documentation regarding the deposit registration to the tenants at the start of the tenancy. However, further investigation revealed that the tenants had taken legal action on the basis that Mr J had taken advantage of a typographical error in one of their letters to argue that he was entitled to retain their advanced rent for a period after the tenancy had ended, and to make deductions to these monies in relation to remedial works.
Outcome
Whilst I supported the complaint that the Agent had not provided all of the required information concerning the deposit to the tenants at the start of the tenancy, I did not conclude that this was the reason for their subsequent litigation. As such, I did not consider that an award of financial compensation was merited.
Learning
When registering the deposit with a tenancy deposit scheme, agents should always ensure that the tenant receives full documentation.