Deposit - Tenant Fees Act 2019

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    Deposit - Tenant Fees Act 2019

    I'm a landlord and would appreciate if you could advise whether I will be in compliance with the Tenant Fees Act 2019.

    I signed a tenancy agreement before 1st June for a tenancy beginning after that date and requested a deposit equal to 6 weeks of rent.

    Based on 30(1)(b), I believe this is legal as this is a "requirement imposed by or pursuant to a tenancy agreement entered into before the coming into force of that section". I would like to confirm that the date I would have "entered into" the tenancy agreement is the day the agreement was agreed and signed and not the date the tenancy starts.

    Also, 30(6)(b) says that:

    If, after the end of the period of one year beginning with the date on which section 1 comes into force—

    (a)the landlord or a letting agent accepts a payment from a relevant person pursuant to the provision, and
    (b)the landlord or letting agent does not return the payment before the end of the period of 28 days beginning with the day on which it is accepted,

    the landlord or letting agent is to be treated for the purposes of this Act as having required the relevant person to make a prohibited payment of that amount at that time.

    Does this mean I would have to return the additional 1 week deposit before 1 April 2020?







    #2
    Wasn't the question you asked but how can you be sure the place will be empty and in good condition & current tenant gone?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      12 months after 1st June, if you enter into a new tenancy agreement or the tenancy becomes statutory periodic, I would say that you have received the deposit again, and it will be a prohibited payment.

      It does seem a lot of potential fuss for a week's deposit.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Originally posted by jpkeates View Post
        12 months after 1st June, if you enter into a new tenancy agreement or the tenancy becomes statutory periodic, I would say that you have received the deposit again, and it will be a prohibited payment.
        That does not appear to be what S30 says for SPTs

        Comment


          #5
          Originally posted by Pergola View Post
          Does this mean I would have to return the additional 1 week deposit before 1 April 2020?
          No .
          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

          I do not answer questions through private messages which should be posted publicly on the forum.

          Comment


            #6
            Originally posted by MdeB View Post
            That does not appear to be what S30 says for SPTs
            I agree, but then, Superstrike...
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              It seems unclear to me - I read this

              'Where a tenancy was granted before 1 June 2019, if any provision of the tenancy would be prohibited (had the tenancy been granted from 1 June 2019), the provision ceases to be binding on the tenant (or a relevant person) after 1 year from commencement of section 1 of the Act (but the agreement continues, so far as practicable, to have effect in every other respect).'

              So the self employed tenant I have who has a contract (since 2015) that pays monthly rent 3 months in advance would cease to be binding and would only be required to pay 1 month in advance? He is on a statutory periodic tenancy as we agreed years ago that the fees the agent would charge to redo a contract were unecessary. He's happy with the arangement and acknowledgs his income is lumpy so is not always on time with rent, but hence why originally 3 months in advance so there is wiggle room.

              Comment


                #8
                If the tenancy is outside a fixed term and the tenant pays rent three month's in advance, that's almost certainly a series of deposits.

                There's a concept called "saving" that the tenant could be introduced to.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Originally posted by jpkeates View Post
                  If the tenancy is outside a fixed term and the tenant pays rent three month's in advance, that's almost certainly a series of deposits.
                  No it's not. If someone pay rent X monthly in advance every X months, that's just rent. An liability arise every X months, the payment is to discharge that liability.

                  Issues with deposit only arise when say multiple months worth of money are taken, and before that length of time are up, the landlord expects rent again, so the tenant is always so many months ahead.

                  Originally posted by nbhamilt View Post
                  It seems unclear to me - I read this

                  'Where a tenancy was granted before 1 June 2019, if any provision of the tenancy would be prohibited (had the tenancy been granted from 1 June 2019), the provision ceases to be binding on the tenant (or a relevant person) after 1 year from commencement of section 1 of the Act (but the agreement continues, so far as practicable, to have effect in every other respect).'
                  It's talking about things such as penalty clauses, end of tenancy professional clean fees etc. no longer applying. Money already taken and held as deposit wouldn't be affected by it.
                  I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                  I do not answer questions through private messages which should be posted publicly on the forum.

                  Comment


                    #10
                    Originally posted by KTC View Post


                    Issues with deposit only arise when say multiple months worth of money are taken, and before that length of time are up, the landlord expects rent again, so the tenant is always so many months ahead.
                    .
                    Thanks, Oh dear, Yes, that is the situation that was originally set up by the agent, that rent was paid monthly, but would always be paid 3 months in advance as the initial payment was for 3 months rent (plus a normal deposit that went into the deposit protect service). I'm guessing that I have until June 2020 to bring it down to a normal 1 month in advance and draw up a new contract?


                    Comment


                      #11
                      Originally posted by KTC View Post
                      No it's not. If someone pay rent X monthly in advance every X months, that's just rent. An liability arise every X months, the payment is to discharge that liability.

                      Issues with deposit only arise when say multiple months worth of money are taken, and before that length of time are up, the landlord expects rent again, so the tenant is always so many months ahead.
                      I don't agree, for values of X over 2 in a periodic tenancy.

                      The money is being taken as security because the rent is being taken so far in advance that the months for which rent is being taken may not happen.
                      A tenant only has to give a month's notice (etc) and the landlord two month's notice, so when the money is received it's not rent.
                      It might become rent, if the tenant doesn't end the tenancy, but it's not possible for it to be rent at that point.

                      That doesn't apply to rent paid monthly in advance (or two month's in advance assuming the rent due date is the first day of the tenancy period), but it does for something paid three month's or more ahead.

                      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                      Comment


                        #12
                        I don't.... what.... why... ?

                        So at month 0, the tenant paid a "deposit", and 3 months worth of rent.
                        Then at month 1, they paid 1 month of rent.
                        At month 2, they paid another 1 month of rent.
                        etc. ?

                        Sorry jpkeates, you read the previous post right, I was thinking nbhamilt meant rent payable 3-monthly.

                        Erm.... nbhamilt, your problem isn't the Tenant Fees Act 2019, but the Housing Act 2004. More specifically, that extra 2/3 months worth of rent is actually a deposit, which you haven't protected, hence attracting a 1x-3x penalty per tenancy.
                        I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                        I do not answer questions through private messages which should be posted publicly on the forum.

                        Comment


                          #13
                          Originally posted by jpkeates View Post
                          I don't agree, for values of X over 2 in a periodic tenancy.
                          The period doesn't have to be monthly, it can be quarterly, half-yearly, yearly etc. I was thinking of e.g. a quarterly periodic tenancy with rent payable quarterly in advance which is perfectly normal. But nbhamilt was describing something else.
                          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                          I do not answer questions through private messages which should be posted publicly on the forum.

                          Comment


                            #14
                            If the tenancy is periodic, that might be one whole shedload of individual monthly tenancies.

                            As a practical outcome, I'd suggest telling the tenant that the new tenant's fees ban is causing you some concerns about the arrangement, who knows how it will work in practice, etc.

                            Return two month's rent to the tenant and suggest that they put it into a saving account and start paying monthly with the savings account to support any fluctuations in income.

                            That doesn't mention deposits or encourage them to google.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              Originally posted by KTC View Post
                              The period doesn't have to be monthly, it can be quarterly, half-yearly, yearly etc. I was thinking of e.g. a quarterly periodic tenancy with rent payable quarterly in advance which is perfectly normal. But nbhamilt was describing something else.
                              I agree with you - I tend to think of rent being monthly by default, it's so rarely anything else in residential leases.
                              Should probably think in terms of periods rather than months.
                              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                              Comment

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