AIBU to keep hold of tenants' rental deposits?

[BycullahRoad]

I'm a long term landlord, with a three bedroom flat quite a distance away from where I am now, but which will hopefully be my retirement home one day. I've been renting it out as a flat share with three tenants, each having one bedroom each. Current group of three tenants (two men, one lady) had been there for just over two years. Their original tenancies have expired so that now they are on periodic tenancies.

Two of the tenants have become a couple and have just had a baby together. Third tenant does not appreciate new baby in the flat and has given notice to leave. Remaining couple came to me and said that now that they have a baby, they want improvements doing to the flat.

The lady is lovely but to be honest her partner has always been a bit off with me. I had a meeting with them in the flat over Easter, noticed that they had done some pretty dodgy DIY, and they had taken up the carpet and replaced with laminate flooring that is against the terms of the lease. Having said that the flat was fundamentally clean and tidy.

I looked at what they wanted doing, had a good think, replied that I was happy to redecorate up to a maximum of £1,000, happy to repair their breakages, but that they would need to take a tenancy for the whole flat, i.e. pay for all three bedrooms, not just pay for two out of three bedrooms, with the new tenancy being prepared and managed by a local estate agent. I checked on Rightmove and found a similar flat, reduced the rent by £100 per month and then wrote to them offering them the flat at that reduced rent and instructed a local agent to draw up the paperwork. However, the new rent would have been about 40% higher than their old rent as the third bedroom was ensuite and was rented out for more, and also I had not put up the rent for many years.

Move forward a month, the local agent has said that he has not been able to arrange a meeting with them, and they have also missed their monthly rent payment (at the old rent). Now they have contacted me to say that they think the new rent is unfair, that they are moving out, they are not paying any more rent and they want their deposits back in full. My reply was that if they wanted their deposits back, they had to at least keep on paying rent (at the old rent) until they departed. Since then they have not replied to any messages.

Would be interested in views as to whether I am being fair, or not?

It depends how you put it to them but unfortunately you might have muddied the waters for the TDS by offering to waive the damage and redecorate unless you can show that was subject to them entering the new tenancy at the higher rate.

On that basis apply the deposit FIRST to the unpaid rent (old rate obviously) and only look to recoup damages if there is any deposit left after rent (sadly there might not be).

You need to tread really carefully here.

Yes you can keep the deposit for unpaid rent. Our landlord did this. We were using housing benefit to pay the rent, then council queried identity of landlord who in turn refused to prove identity or send any of the proof housing benefit required, he also did not provide us with a new tenancy when he moved us to another flat in the same block, so council said we have no proof you live there or owe rent in that address so no money, and landlords wouldn't provide proof he had moved us to the other flat despite me saying he'd get rent as soon as he did!! But no, sat on his backside and did nothing, then claimed the deposit. And then sent the deposit claim form to an old block of flats we used to live in, on purpose, so we couldn't even challenge it with TDS as we didn't know it had happened!!

So yes, of course you can in this situation.

You’ll get more money renting three individual rooms as you were before. You won’t be able to rent out the third room with a couple and a baby living there.

You are better of getting rid. Deduct the rent from the deposit in addition to any damages they have caused.

Issue s21 proceedings (having checked, checked and checked again that you've done it correctly re timings - or pay someone to issue).

Any communication with them in writing from now on.

When they do leave keep scrupulous records of damage repair, cleaning etc needed, to submit to TDS to argue that you can use the deposit for these. Open case with TDS.

Missed rent - I'm not sure on this one as it's been a while since I've done it, but I think you'll need to go through the small claims court. If they will be gone by the time you do this, it would be very handy if you had their bank account and sort code, because when they ignore the small claims judgment in your favour you can apply for a third party debt order to claw back any money owed to you that is sitting in their account. What I did with my absolute turd of a tenant was ask for their bank details "for any deposit monies to be returned", so I could use that info to apply for the debt order. Yeah, cue howls of outrage - I was £3000 down and had cleaned quite a lot of human shit off my walls in the preceding week.

Thanks everyone, yes the unpaid rent now exceeds both their deposits. I suppose I'm really just looking for the quickest and easiest way to get my property back relatively undamaged.

Do you know anything about the process to evict tenants? Look on landlordzone

Keep the deposit and sue them for the damage they caused too, cheeky fuckers.

If it's been two months since the s21 was issued, then they should be out and if they haven't vacated, issue court proceedings immediately. The county Court are very helpful. Put a copy through the letterbox as well as in the post.

If you need to return to court to get bailiffs, again, do so as early as possible. Do you have contact details for their wider family, as you may want those for future claims of costs against them (though they may not care about getting a CCJ in which case it would be good money after bad)

We had a terrible time with our last tenant, he lost his job so we kindly/stupidly let him stay until he could sort himself out. He was way behind on rent, the flat was in a terrible state (think never cleaned). We finally gave notice and were told he would only move out if we let him off all his unpaid rent, gave him his deposit back and gave a good reference. We ended up letting him leave as it would cost a fortune to evict-the only thing we refused to do was give a reference. It was horrible and we felt so disappointed as we had let him stay when really we should've forced him out years before. No wonder most landlords are horrible, you end up having to be :-( Good luck with your situation.

@BycullahRoad Mumsnet is not the best place to get professional Landord advice. Please go to Landlord Zone to get advice on the legal side of your situation. Good luck.