Deposit paid to owner but now in Receivership

elephant85

Hi Everyone,

2 and a half years ago I moved into my current property and paid a deposit of €900 (a months rent). This money was paid to the owners of the property. We signed a lease for 1 year. This was renewed the following year.

18 months after we moved in, the complex was put into receivership by the banks. It is currently up for sale and there are 2 firm offers on the table (not sure if they've been accepted or not).

We are not currently under lease as we didn't really want to sign another lease for a year as we were thinking about moving. The letting agency (acting on behalf of the bank) didn't push us either on it and were happy for us to continue in the property without the lease. (My guess the reason for that was because they knew the property would be soon put up for sale).

Today we had an offer on a house accepted and we're going to move out on April 31st. Normally I'd not even consider this, but we're thinking of giving our notice and saying that our deposit is our last months rent.

I know that we're not entitled to do this.. but what can they do if we do persue this course of action?

I'd like to note that the property will be left as we got it (in perfect condition) and that all bills will be paid in full.

Any advice would be gratefully received.

Regards,
F

AfterHrsProp

elephant85 wrote: »

Hi Everyone,

2 and a half years ago I moved into my current property and paid a deposit of €900 (a months rent). This money was paid to the owners of the property. We signed a lease for 1 year. This was renewed the following year.

18 months after we moved in, the complex was put into receivership by the banks. It is currently up for sale and there are 2 firm offers on the table (not sure if they've been accepted or not).

We are not currently under lease as we didn't really want to sign another lease for a year as we were thinking about moving. The letting agency (acting on behalf of the bank) didn't push us either on it and were happy for us to continue in the property without the lease. (My guess the reason for that was because they knew the property would be soon put up for sale).

Today we had an offer on a house accepted and we're going to move out on April 31st. Normally I'd not even consider this, but we're thinking of giving our notice and saying that our deposit is our last months rent.

I know that we're not entitled to do this.. but what can they do if we do persue this course of action?

I'd like to note that the property will be left as we got it (in perfect condition) and that all bills will be paid in full.

Any advice would be gratefully received.

Regards,
F

There is a thread somewhere else on this forum concerning this very topic only recently. Have a search for it.

If you do this they can pursue you for it through the PRTB but it will be difficult for them, time consuming & they will have little to gain. Obviously you can forget about any kind of reference from them or expect to have any dealings with the letting agency again. Hope this helps

Grolschevik

On a related note:

There was a case a couple of years ago where a builder went into liquidation without having returned the deposit on a house to the purchaser. The deposit became assets in the liquidation and the purchaser then became an unsecured creditor. Basically last in line to get their debt paid.

There's a fair chance that something similar applies to your rental deposit, I'm afraid.

djimi

Maybe contact the agency and ask them what the story will be about the deposit. If the bank are looking to offload the property then they might be happy to allow you use your deposit as last months rent if it gets rid of your quicker with less hassle for them!

Kosseegan

Grolschevik wrote: »

On a related note:

There was a case a couple of years ago where a builder went into liquidation without having returned the deposit on a house to the purchaser. The deposit became assets in the liquidation and the purchaser then became an unsecured creditor. Basically last in line to get their debt paid.

There's a fair chance that something similar applies to your rental deposit, I'm afraid.

Unlikely. The receiver is now the landlord and has a personal obligation to return the deposit.

LisaLee

I would give Threshold a ring. They've helped us in the past and have been great for legal advice.

http://www.threshold.ie/advice/help.html

Chris_5339762

Sounds to me you're on a part 4 lease and your notice time is given as follows.

Length of tenancy Notice by tenant
Less than 6 months 4 weeks (28 days)
6 months to 1 year 5 weeks (35 days)
1 – 2 years 6 weeks (42 days)
2 or more years 8 weeks (56 days)

This is a difficult situation. You're not allowed to use the deposit as the last months rent but if you are going to be last in the unsecured creditors list it would be hard for anyone to suggest otherwise.

In any case, don't tell them you're moving out on April 31st as April 31st doesn't exist

Joe Hart

Do not pay your last months rent when you move out. Life is too short to be messing about chasing deposits.

The_Conductor

Joe Hart wrote: »

Do not pay your last months rent when you move out. Life is too short to be messing about chasing deposits.

Its illegal- and as it appears the landlord is a company who is in liquidation, rather than a private person, you are opening yourself to all manners of grief. The deposit makes the tenant an unsecured creditor of the receiver.

OP- contact the receiver and see what they are amenable to- and get everything in writing.

ted1

smccarrick wrote: »

Its illegal- and as it appears the landlord is a company who is in liquidation, rather than a private person, you are opening yourself to all manners of grief. The deposit makes the tenant an unsecured creditor of the receiver.

OP- contact the receiver and see what they are amenable to- and get everything in writing.

I would not pay it, there is very little chance of getting it back.

The_Conductor

ted1 wrote: »

I would not pay it, there is very little chance of getting it back.

Its the law.
If you don't pay it- you become a debtor to the company in receivership.
The receiver is in a very strong position to lob a claim against you- and he would succeed.

I don't care whether you like it or not- it is the law, period.

What is most likely- the receiver would sell the debt to a debt collection company- who would pursue the claim independently of the deposit. Its what BOI and some other lenders are doing with their rent receivers at the moment.

The Dagda

The same thing happened to my g/f, the original landlord went into receivership and the new landlord refused to engage about returning the deposit. My g/f had paid the rent right up until the day she left, so she lost her deposit.

Don't pay your last month's rent as you will not receive your deposit. You should write to all parties asking what is happening about getting deposits returned. You don't have to worry about not having a current contract as you are in a defacto contract based on your previous one. Threshold told my g/f that not having a current was actually an advantage?

Speak to Threshold they'll advise you how to proceed.

The Dagda

smccarrick wrote: »

Its the law.
If you don't pay it- you become a debtor to the company in receivership.
The receiver is in a very strong position to lob a claim against you- and he would succeed.

I don't care whether you like it or not- it is the law, period.

What is most likely- the receiver would sell the debt to a debt collection company- who would pursue the claim independently of the deposit. Its what BOI and some other lenders are doing with their rent receivers at the moment.

It may be the law but in the real world they won't go the bother and expense of pursuing such a small amount.

If, by some chance, this ended up in court, any decent solicitor would be able to convince a judge that the new landlords should be pursuing the previous one for outstanding deposits.

Stop scaremongering.

Zulu

ted1 wrote: »

I would not pay it, there is very little chance of getting it back.

Isn't there a rule about giving illegal advice? What you are proposing is illegal.

The_Conductor

ted1 wrote: »

I would not pay it, there is very little chance of getting it back.

Infraction for illegal advice.

The_Conductor

Joe Hart wrote: »

Do not pay your last months rent when you move out. Life is too short to be messing about chasing deposits.

Infraction for illegal advice.

The_Conductor

Please read the forum charter if you intend to continue posting here.

drunkmonkey

Rather than not pay the rent, contact the Reciever and see will they give the deposit back, if not see will they give you the rent free instead until you move out. House sales can drag on, it's quite possible it could take several months from when your deposit is put down. Until your solicitor gives it to you in writing when you'll have the keys don't be in a rush to move out.
I don't think you'll get a penny off the receiver but they may do the free rent.

ted1

Jesus lads , lets get real it may be against the law but it is the best course of action. Also if you read what I said a factual statement that I wouldn't pay it. That is not illegal advice it's a statement .

I think people come on to the forum looking for suggestions. If people want to argue about the ins and outs go the legal side then there is a legal forum

drunkmonkey

Receivers are fcukers to put it mildly, you don't want them after you for money. I doubt they'd go after op but still your better off do a deal with them.
If op has the new house by June they'd be going well.

djimi

ted1 wrote: »

Jesus lads , lets get real it may be against the law but it is the best course of action. Also if you read what I said a factual statement that I wouldn't pay it. That is not illegal advice it's a statement .

I think people come on to the forum looking for suggestions. If people want to argue about the ins and outs go the legal side then there is a legal forum

The best course of action is to sit down and talk to all parties concerned, not plough on ahead making up your own rules. This is not some cowboy operator landlord who hasnt got a pot to piss in and wont persue you; the situation that the OP is in is a whole different ball game and what you are suggesting is not helping them one bit.

Bigcheeze

smccarrick wrote: »

Its the law.
If you don't pay it- you become a debtor to the company in receivership.
The receiver is in a very strong position to lob a claim against you- and he would succeed.

I don't care whether you like it or not- it is the law, period.

What is most likely- the receiver would sell the debt to a debt collection company- who would pursue the claim independently of the deposit. Its what BOI and some other lenders are doing with their rent receivers at the moment.

While strictly accurate, this is awful advice.

djimi

Bigcheeze wrote: »

While strictly accurate, this is awful advice.

How can accurate advice be awful?

Bigcheeze

djimi wrote: »

How can accurate advice be awful?

Because it's not practical. The advice is basically to throw away his deposit.

By way of comparison, in receiverships and examinerships, employment law gets chucked out the window and things happen to people that would otherwise be illegal and they happen for practical reasons. The OP needs to act practically.

I would also question if the OP would be breaking the law as where does it say in law how a tenant should act if the deposit is incapable of repayment ? Answer: it doesn't.

I have had a liquidator pursue me for money owed to a company in liquidation . I explained that while technically I owed the money, the company in liquidation was clearly unable to honour its future commitments to me so I would not be settling the debt. End of story.

Lyn256

If it were me-I'd prefer to be in the position that the receiver was pursuing me for rent than me pursuing them for a deposit. (Will the receiver even know where to pursue the OP????)

Saying that I'd investigate it thoroughly before I made a decision (Talk to Letting Agent, receiver if possible and Threshold and anyone else that can advise).

I'd find it very hard to pay my last months rent knowing that the likelihood of getting my deposit back was very remote.

elephant85

Thank you to all who have replied.

I contacted threshold who have advised us to contact the agency in writing asking them to confirm the position on the situation with the deposit. She advised that some receivers do pay back the deposit but we need it specified in writing if this is the case with us.

We've sent an email asking what the status is.

She advised if they confirm that they will not be paying the deposit that only then would they suggest withholding the last months rent. She was insistent that we needed everything in writing though before we could proceed with such a course of action.

She also advised taking loads of photos of the property when we move out to proove that we've left the property in good condition.

I'll let ye know what the agency comes back with.

djimi

If you want to have something in writing then get it in a letter; I would not trust email as a form of paper trail.

elephant85

Ok.. will do. I'll wait for their response and then ask them to confirm that in writing.

In a similar situation and when discussing the deposit with the new agency appointed by the receiver I was told "it's between you and the original agency". The original agency I rented off transferred over 90 euro of the original deposit which the new agency took to pay an outstanding ESB bill belonging to one of the other tenants. When I questioned them about using the 90 euro I got a "what are you going to do about it" reply and a thinly veiled threat that I'd be evicted if I made too much hassle over it.

Mr.Wemmick

I would write a registered letter to the agency telling them that you are seriously considering not paying your last month's rent because of the changes that have occurred and the ongoing legal situation/ownership of the complex. I would then ask them to respond to you in writing before the 1st of April and to advise you what is the best course of action regarding the deposit - pay or not to pay. Ask for written assurances that the deposit will be paid back to you on final day of tenancy once all checks are completed to everyone's satisfaction. Inform them the flat is in excellent order, invite them to do an early check if they so wish at any time in the coming days/weeks.

If you do not hear back from them, then at least you've been upfront and honest about living out your deposit if you wish to follow that course of action.

Chris_5339762

Deleted User wrote: »

In a similar situation and when discussing the deposit with the new agency appointed by the receiver I was told "it's between you and the original agency". The original agency I rented off transferred over 90 euro of the original deposit which the new agency took to pay an outstanding ESB bill belonging to one of the other tenants. When I questioned them about using the 90 euro I got a "what are you going to do about it" reply and a thinly veiled threat that I'd be evicted if I made too much hassle over it.

Report them for threats of illegal eviction.