Deposit - Tenant Fees Act 2019

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    #16
    Originally posted by KTC View Post
    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.
    Well its what teh agent set up and they are (supposedly) a clued up and responsible agent. Ironically because his income is so lumpy, he has been behind by about 6 weeks recently, so in actuality I won't need to return anything, i can just tell him that i'll move onto a month in advance, but with the expectation that it is piad on the last day of the month for the following month nd to get himself a savings account to. Sounds like i need to go and sack the agent tho.

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      #17
      Ok, just went back to teh initial contract, the way the agents set it up was as follows

      06/06/2012 6 weeks dilapidation deposit 2040
      06/06/2012 Rent due covering final 2 months of the tenancy 2947

      so from all this, i guess i need to refund the 2947 and get the deposit protection service to refund 1 week from the 6 weeks by June 2020?

      Comment


        #18
        If it's clearly stated that the £2947 payment is to discharge the tenant's liability for rent for the final 2 months of the tenancy, you may be okay in terms of deposit protection if the tenancy continues on a contractual periodic basis after any initial fixed term, with a minimum notice period of 2 months by the tenant. If however you simply had a fixed term, that then turned into a statutory periodic tenancy, that's more problematic since the final 2 months of that (fixed term) tenancy came and went and you didn't use the money to for the last two months rent.

        You don't need to reduce the six weeks to five.

        The good news I have for you is that 2012 is more than six months ago, so the deposit penalty for the fixed term should be over. I don't know when any SPT (if any) started, but I guess that's close to six years as well if not over assuming you didn't renew multiple times. Otherwise (£2040+£2947)*3 = just under £15,000 potential liability 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.

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          #19
          Originally posted by theartfullodger View Post
          Wasn't the question you asked but how can you be sure the place will be empty and in good condition & current tenant gone?
          Reasonable question. The current tenants wanted to sign a 12 months extension and I was happy to oblige - the elimination of S21 hadn't yet been announced!

          Since the original deposit was for 6 weeks, I thought it'd be simpler to continue to use this as the deposit for the renewal rather than claiming the deposit and then protecting an amount equivalent to 5 weeks of rent. However, I then realised I might run foul of S30 in a year's time, hence my question.

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            #20
            Originally posted by KTC View Post
            If it's clearly stated that the £2947 payment is to discharge the tenant's liability for rent for the final 2 months of the tenancy, you may be okay in terms of deposit protection if the tenancy continues on a contractual periodic basis after any initial fixed term, with a minimum notice period of 2 months by the tenant.
            That won’t wash either.

            Paying the “last months” of a tenancy in advance used to be a familiar scam to evade the deposit rules, but has been found wanting. It’s a deposit, because there’s no certainty which months are being paid for (you might get away with it if you define the two month’s as months 5 and 6 of a 6 month fixed term and actually use it for that.)


            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).

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              #21
              With a fixed term, it's clearly okay since there's nothing stopping parties from agreeing in advance that rent for certain specific months of the tenancy are payable in advance and when. I'm pretty sure nearlylegal and another lawyer agreed on that I think I read on Twitter.

              With a CPT where the notice period is at least as long as the payment covers, it could be arguable I think. Not something I would want to try myself, but it's at least arguable if a landlord too late finds themselves in such a hole.
              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.

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                #22
                The main deposit was put into a deposit protection service. Its only 1 flat as its my old home that is rented out as my work provides housing while I am in the post. I will be immediately going down to one month in advance only from - well yesterday I contacted the tenant.

                What happens for example, though, if given the lumpy nature of a tenant's income they actually chose to pay 3 months up front of their own volition? would that count as a 'deposit'? As he has done that before as well!

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                  #23
                  If the tenant is simply paying the next three months rent in advance, it's just rent paid in advance.
                  The issue is when you're holding money that will be used for rent if the tenant is short of money for some unspecified month in the future.
                  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


                    #24
                    OK, thanks all for advice and help, well as he hasn't paid for April yet and was £273 short in March, I have told him that the sum will be used for April and then £273 will be due for May rather than the full rent; and to put the money he doesn't have to spend on rent into a savings account so that June rent will be paid on time on 31st May and there will be low tolerence on late payment going forward from that date. I hope this in and of itself will resolve any potential issue that could have arisen. He's a good guy, looks after the flat well, so don't prticularly want him to leave, but I do wonder if teh time has come to quit renting alltogether with legislation changing. I am no professional and do not have time to keep abrest of all these changes, its only luck I found this out.

                    I will refund 1 of the 6 weeks held in the depositit protection serice just to be safe as well.

                    :/


                    Comment


                      #25
                      Originally posted by nbhamilt View Post
                      I will refund 1 of the 6 weeks held in the deposit protection service just to be safe as well.
                      Yeah, don't do that, it will make things very confusing and it's quite difficult to do in practice.
                      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


                        #26
                        Is the consensus that:
                        - a periodic tenancy from before 1 June 2019 would not require a return of the amount of deposit in excess of 5 week's rent, even after 1 June 2020;
                        - a fixed tenancy that becomes periodic (statutory or contractually) between 1 June 2019 and 1 June 2020 would not require a return of the amount of deposit in excess of 5 week's rent, even after 1 June 2020;
                        - a fixed tenancy from before 1 June 2019 that becomes periodic after 1 June 2020 will require a return of the amount of deposit over 5 week's of rent.

                        Comment


                          #27
                          Yes.
                          Yes.
                          Debatable.
                          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


                            #28
                            Originally posted by Pergola View Post
                            Is the consensus that:
                            - a fixed tenancy from before 1 June 2019 that becomes periodic after 1 June 2020 will require a return of the amount of deposit over 5 week's of rent.
                            The Act says nothing about payments taken before the Act comes into force, only about payments required to be made after the Act comes into force.

                            I cannot see that LL is requiring the payment of a deposit over 5 weeks rent when the tenancy becomes statutory periodic.

                            However, I can see that the Superstrike ruling that a deposit is deemed paid to LL when spt starts may have an influence. So, as KTC says, it is debatable.

                            Comment


                              #29
                              Originally posted by MdeB View Post

                              However, I can see that the Superstrike ruling that a deposit is deemed paid to LL when spt starts may have an influence. So, as KTC says, it is debatable.
                              If that's the case, then wouldn't:

                              - a fixed tenancy that becomes periodic (statutory or contractually) between 1 June 2019 and 1 June 2020 would not require a return of the amount of deposit in excess of 5 week's rent, even after 1 June 2020;

                              also be debatable as per Superstrike, the deposit would be considered to have been paid again after 1 June 2019? With a contractual periodic tenancy, the landlord can claim this was:

                              30(1)(a) a requirement imposed before the coming into force of that section, or
                              (b) a requirement imposed by or pursuant to a tenancy agreement entered into before the coming into force of that section.


                              but I don't see how this argument would apply to a statutory periodic tenancy.

                              Comment


                                #30
                                A periodic tenancy from before 1 June 2019 falls under s30(1).

                                A fixed tenancy from before 1 June 2019 that becomes periodic between 1 June 2019 and 1 June 2020 contractually is a continuation of a single tenancy and also falls under s30(1).

                                A fixed tenancy from before 1 June 2019 that becomes periodic between 1 June 2019 and 1 June 2020 statutory falls under s30(2).
                                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

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