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Withholding final month rent due to failure to receive deposit back

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2849 views 1 replies latest reply: 22 February 2015

My partner and I have been living as private tenants in the same flat since 2006.  We rented initially throgh a managing agent.  Around two years’ into the tenancy the loandlord defaulted on his mortgage and receivers were appointed. Our tenancy was trnasferred across to another agent.  A few years later, another receiver was appointed along with a third lettings agent.  In December, we received notice of possession from the agent due to the receivers looking to sell.  Upon informing the agent of our move out date, I enquired about the deposit (we paid one month rent as deposit to the oroginal agent back in 2006) and I was informed that they don’t hold the deposit and to contact the orignal agent.  The original agent are now trading under a different name, and when I contacted them, they informed me that everything would have been passed to the agent who took over from them initially, also citing that since it’s been over 5 years since we worked with them that there would be no record of our relationship from their end. 

It seems that none of the agents have our depost!  

I’ve since informed our current agent that we are withholding the last month rent due to the fact we won’t be getting our deposit back.  They have informed me that we will be expected to pay rent up to date and suggest we pay to avoid them pursuing us.  I have also emailed them our orginal deposit receipt. 

I guess the advice I’m after is am I within my rights to withhols my deposit in light of this situation? 

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Hi Matthew

Generally, withouthold rent is never a good idea as this will put you in breach of your tenancy agreement. The consequences of that are normally that the landlord can remove you from the property (which doesn’t matter here) and come after you through the courts for the remainder of the rent. I suppose it could also affect your ability to rent elsewhere in terms of the reference?

As your tenancy is pre 2007 the requirement for the landlord to protect the deposit wouldn’t have applied to that initial tenancy. However, the question is whether you’ve had any new tenancies post 2007 that would trigger that requirement. I’m not a lawyer so you might want to get some professional advice on this but if you had new tenancies/new landlords as a result of the situation with the landlord’s finances then it might well be the case. If so, then the landlord has broken the law by not protecting the deposit and you’d be able to seek compensation of 1-3 times the deposit, as well as the return of the original deposit. But you would need to establish whether that protection applies to you via somewhere like the Citizens Advice Bureau or one of the law centres around the UK that gives free advice.

I would imagine that whoever the current landlord is should be responsible for having kept track of your deposit – that’s not up to you. Remember that it’s the landlord that has all the responsibility here, the agent is just their representative. The agent is also being paid by the landlord so they’re going to try and do everything possible to protect their own reputation with the landlord, even if that means leaving you out of pocket and not doing things properly (unfortunately that’s way too common in the renting sector).

As to whether you should withhold the rent perhaps try writing to the agent and remind them that it’s the current landlord’s responsibility to know where your deposit is and that makes it their responsibility too. Have a look at what your tenancy says about the return of the deposit and how that should proceed – some tenancies state the deposit can be held in lieu of the last month’s rent so if that’s the case then the agents really can’t argue. It’s odd that they don’t seem to have appreciated that the deposit would (most likely) pass with the responsibility for the tenancy – that suggests they don’t really know what they’re talking about.

I would seek some advice on whether they should have protected your deposit and what the consequences would be for you of being taken to court for that last month’s rent. On the face of it, it makes sense for you to hold on to it in exchange for the lost deposit but they are two separate things so I’m not sure what view a court would take. On a practical level, if you pay that last month’s rent and the current agents have no idea where the deposit is, will you ever get the deposit back… it might be worth holding on to the rent for a bit – you should have around 14 days before it becomes a ‘late’ rent payment, which might give you some time to work out whether there’s any likelihood of them locating the deposit.

Hope that helps


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