Here is a question to the blog clinic from Ivan who is a landlord:
The DPS adjudicator ruled that as I sold the house some months after a tenant left I had made no loss. They returned all the deposit to the tenant who had damaged the house to the tune of £1850.
Surely their ruling should have been made to reflect the house state at the point of the tenant leaving and not what happened after this date?
My agent had failed to tell them that I had to make a substantial reduction in the asking price to allow for the damage as they did not think it relevant.
The DPS will not talk to me only my agent and they will not talk to me (probably because they know they were negligent).
The ombudsman has closed the case without answering my question as he believes the agent was not negligent. Where do I go now?
Answer
Tenancy deposit adjudications were set up to be a quick and easy solution to disputes over deductions from the tenancy deposit – but they still work in the same way as a court claim.
Basically you need to prove two things, by evidence. The two things are
- Liability and
- Quantum
Liability
In a tenancy deposit claim situation liability generally proved by the check in and check out inventories showing a deterioration in the property between the time the tenant moved in and the time he moved out.
It has to be clear that this deterioration is down to the tenant and that it is not down to fair wear and tear. Presumably you are able to do this, so your issue is with the second item.
Quantum
This is the (reasonable) loss you have suffered as a result of the damage which you have shown was caused by the tenant.
In most cases this is things like the cost of replacing damaged items or repair work. This will be proved by the landlord providing receipts and estimates for the work or cost of replacement items.
However in your case your loss is the reduction in the selling price that you were able to achieve for the property.
Others may disagree here, but I don’t see why you should not be entitled to claim for this. It is after all a financial loss you have suffered as a result of the tenants breach of contract – which is what the deposit is for.
Provided you are able to show that your losses did actually flow from the tenants damage to the property and that the reduction in price was not down to some other reason – such as market fluctuation.
The only problem is – your agents did not tell the adjudicator about the drop in sale price.
Adjudicators are not mind readers. They can only make their decision on what they are told. So if your adjudicator was not told that you were forced to reduce the sale price, he will not have been able to take account of this when making his decision.
Hence the return of the deposit to the tenant.
The agents liability
If your agents were aware of the drop in the sale price, I think this is something that they should have told the adjudicator. I can see why they didn’t do this, as it is a bit out of the ordinary and it is not what they are used to.
However I suspect that if the adjudicator had been told that you had to drop the sale price and was given some evidence to show that this was directly due to the damage done by the tenant, there is a chance that he would have allowed at least part of your claim.
So I think it is something your agents should have done.
The Ombudsman
You mention an Ombudsman – I am not sure who you mean here. If you are referring to a claim by you to one of the statutory Ombudsman services such as the Property Ombudsman or the Property Redress Scheme, then it is hard to comment on whether their decision was right without seeing what you told them.
However my view is that if your agents were aware of the drop in the sale price at the time, this is a material fact which they should have included with their submissions to the adjudicator, and that their failure to do so will be a legitimate cause for complaint on your part.
Where now?
As to where you can go now, there is always the option of bringing a claim in the Small Claims Court. You would then also be able to claim for more than the deposit sum (if your losses were greater than this).
Whether you will actually want to do this however will depend on whether you want to go through the stressful business of bringing a court claim, and also (very importantly) whether you think your former tenant has the resources to pay such a claim. You will also need to have his current address.
Your claim will also be less straightforward as your losses are the drop in sale price rather than the actual cost of repair or replacement, so will not be an easy one to bring.
You should therefore take legal advice before you do anything.
Based on the information provided the agent would seem liable as Tessa has mentioned. It seems quite obvious so I’m not sure why the Ombudsman found in favour of the agent. Therefore I think there is more to this than meets the eye. Perhaps the agent was unaware of the drop in price?
We always ask landlords to approve the final TDS applications before we send them so they have the oportunity to comment and bring things to our attention.
As the TDS already found against your deposit claim and the Ombudsmand found against your claim for negligence, I think you’d be hard pushed to get a judge to agree with you whether you took the tenant or the agent to court.
Yes, one always has to be aware in these questions that we may not have been told the whole picture. However I have to answer on the basis of what I am told.
I agree that a court claim would be very tricky and realistically probably not worth it.
The crucial comment made by the landlord seems to me to be this:
“My agent had failed to tell them that I had to make a substantial reduction in the asking price to allow for the damage as they did not think it relevant.”
I agree entirely with the comments made by Tessa here. In respect of the deposit dispute, the Adjudicator needs to be satisfied that the sum claimed is a reasonable cost “incurred or likely to be incurred as a result of a breach by the Tenant”. In view of the sale of the property, it appears that there was no evidence in this dispute that the Landlord had incurred any costs in repair of the damage, the property having been “sold as seen”. There are many factors that will affect the agreed price vs asking price argument, but in reality it is quite common for asking prices to be advertised by vendors with the reasonable expectation that a lower sale price will subsequently be agreed. The Adjudicator would need to be satisfied that there was a direct causal link between the acceptance of a reduced price and the condition of the property as left by the Tenant. The landlord acknowledges here that their Agent did not make the Adjudicator aware that this was the basis of their claim. As Tessa says “Adjudicators are not mind readers”.
It is possible for the Adjudicator to make an award on this basis, however sufficient supporting evidence would need to be provided to persuade the Adjudicator that the reduced price related solely to the reduced condition of the property, and went beyond the expected general negotiation/bargaining in respect of agreeing an actual price for sale. In this situation, it may have been helpful to send the Adjudicator supporting correspondence or emails between the estate agents and prospective purchaser in respect of the agreement for sale, or maybe a statement or letter from the purchaser could have been sent to support the Landlord’s/Agent’s submission in respect of the reasons for the agreed reduced sale price.
Thank you Kevin, that is really helpful and gives agents / landlords in this position an idea of the sort of evidence they will need to provide.
I have a big case, at least as ar as the amount of evidence and length of time of poor management by the agent is concerned, going through TPO right now and close to a conclusion. Will let you know the outcome Tessa as it is an open and shut case as far as weakness on the agent’s part is concerned, so neither myself nore my clients are holding our breath for much more than the agent originally offered, but which was rejected as to accpet it meant not being able to go to TPO.
This case strikes me as similar, though with clear differences. I would sue the agent, or threaten to, odds are their insurers will cave in and settle for such a small amount as the excess per claim is probably £1000 anyway.
So if the evidence, presented later rather than the earlier Tessa is right and it should have been, is that strong and obvious, the insurer will see this and not get involved in the £5000+ legal costs it would take them to fight it. They’ll settle and make the agent pay the excess amount of it – who knows might even be higher than £1000 per claim.
Thank you all for your comments.
I would like to make it clear that the agent did not show me the evidence that she put forward to the TPO apart from what was initially agreed as the cost of the damaged and lost/stolen items. She did not ask me at anytime for proof of loss.
I believe that the decision made by the TPO should have been made on the evidence available at the point of check out as they state “incurred or likely to be incurred as a result of a breach by the Tenant”
How do I take this point up with the TPO when they will not correspond with me and the Agent refused to take any further action.?
Write to the Ombudsman himself Christopher Hamer quoting all his initials and qualifications etc on the envelope mark it strictly personal open addressee only and put it in another envelope addressed identically.
Put a note in the inside envelope saying “I said thiis was to be opened only by Christopher Hamer himself” in cse anyone does open the outer envelope, like his secretary or the person appointed to protect him from the public.
Then in your letter to him explain what has happened in terms of the process, the agent and communication or lack of it. Do not discuss the case itself in any detail at all, just the process and that you are unhappy with how TPO has dealt with it and that they will not now speak with you and your agent refuses to.
Meanwhile sue the agent they will pass it to their PI insurer who will then settle with you.