Rental Nightmares: How Can Tenants Protect Themselves?

By Staff Reporter Mar 07, 2022 01:43 PM EST

There have been some nightmare stories over the years involving landlords, and of course tenants as well.

Some of the worst stories involve such things as failing to maintain boilers that emit carbon monoxide. Or not fixing damp and mold issues that in turn cause sickness.

By and large, most landlords are decent and understand their responsibilities. Yet there is one issue that continues to cause concern. That is over security deposits.

The UK law firm Hillyer McKeown believes that up to 284,000 landlords are currently holding deposits illegally.

Why illegally? Because since 2007, any security deposit passed from tenant to landlord must be placed into a government-approved protection scheme.

What is the most common tenant/landlord problem?

Since the beginning of landlords existing, there have been disputes between them and their tenants. While most tenancies do go ok, there are many cases of nightmare tenants or disreputable landlords.

There have been horror stories of landlords letting themselves into homes while the tenant is away and searching through their belongings, and even stealing from them. But for most people, the biggest problem they are likely to encounter concerns their deposits.

Millions of people have had disputes over the amount of security deposit that has been returned. Some landlords, not all thankfully, have managed to dream up all manner of excuses to keep hold of the deposit once the tenancy ends.

To help combat this, the UK government formulated the tenancy deposit scheme.

What are deposit protection schemes?

There are three different versions of the tenancy deposit scheme, but essentially they all have the same purpose. Instead of allowing a landlord to hold on to a tenant's deposit, it must be placed into a secure scheme.

If you are planning on renting a property then you should check if your landlord needs to secure your deposit, and the Citizens Advice Bureau can help with this information.

The idea of the scheme is that the deposit is fully protected and cannot be touched or used by the landlord, or letting agent.

The deposit must also be placed into one of these schemes within a certain time frame. Currently, that time limit is placed at 30 days. This can be done by either a letting agent or the landlord, depending on who received the deposit.

What happens if your landlord refuses to protect your deposit?

You would probably think that with this now being the law that all landlords would comply. However, as you read above, there are hundreds of thousands of unscrupulous landlords who are holding on to tenants' deposits after 30 days of receiving them.

When this happens the tenant has a couple of options.

Write to the landlord

Quite often the first and most reasonable step is simply to establish some form of communication. Email and written letters are effective as they provide a paper trail and you can establish that you have requested that your deposit be placed into a scheme. This can be particularly helpful if you have to take legal action.

However, you may well find that there was a simple oversight, and written communication may be all that is needed for the landlord to comply with the law, albeit a little late.

Take the landlord to court

For many, this is the last option. Going to court can seem to be quite intimidating for some. Nevertheless, the law is clear and the landlord is unlikely to be able to excuse their behavior.

The court should come to one of two options. Firstly, they may simply order the return of the deposit to you. Next, they may order the deposit to be placed into one of the tenancy deposit schemes.

What might also happen is that the court may order the landlord to compensate you. This must be done within 14 days of the order, and it can be as much as three times the amount of the deposit.

The trouble with going to court is that it is time-consuming and costly. The court fee is £308. While this can be claimed back if you win, not everyone will have cash available to sue their landlord.

Use a deposit protection claim company

If communication hasn't worked, and you don't want to go to court, then there is another alternative.

Due to the problem with some landlords not using the government schemes, there are a number of companies that fight to help tenants. There are no-win no-fee deposit protection scheme claims businesses that will do the legal work for the tenant.

Just as the courts can do, these businesses can also get up to 3 times the deposit returned as compensation. What is more, they can do this for every breach of contract.

Consider this. You rent an apartment on a six-month lease. You renew said lease 3 times, meaning you have had four separate contracts. If the landlord failed to place your deposit in an approved scheme at the start of the first lease, he will have been in breach 4 times by the time you signed the last contract.

That means a £500 deposit could potentially be worth £6000 in compensation.

What other concerns do tenants have with landlords?

Common issues that tenants have with landlords are often linked to maintenance. Mold, damp, boilers, fire hazards, smoke detectors, roofing problems, and appliances breaking down. All of these things need to be addressed in a timely fashion.

You may wonder can the lease be changed after it is signed? Or can the rent be raised at short notice? Some parts of leases can actually be changed as long as notice is given, and other areas cannot. When in doubt, seek out legal advice.

Are there legitimate reasons for landlords to keep your deposit?

Obviously, not all tenants are angels either. Common reasons for keeping deposits are due to the state of the property when it is vacated.

A landlord needs to rent their property out straightaway, and some tenants leave homes almost uninhabitable. Cleanliness and damage are the two most common reasons for holding on to a deposit.

There are other times where a landlord tries to keep some of the deposit under dubious pretenses though. There are many tips on choosing a real estate lawyer, but for tenants, it isn't always clear how they should protect themselves.

One thing is clear though, tenants now have far more protection when it comes to their deposits. It wasn't unknown in the past for landlords to actually use security deposits for their own purposes and then find excuses later not to return them.

Having the deposit held in a secure scheme means that no one has access to it until after the tenancy when it must be returned within ten days of both parties agreeing on any deductions.

Summary

There will no doubt continue to be nightmare stories from tenants and landlords alike in the future. Some of these will also involve deposits.

However, if you suspect your landlord has not placed your deposit into one of the three government-approved schemes then you can seek compensation.

Communication is always a good first step and costs nothing but a little time. After this though, you may need to make a compensation claim through one of the specialist services that protect tenants' deposits.