unprotecting deposit

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    unprotecting deposit

    Q1 – Where is the rented property located England

    Q2 – What type of Tenancy Agreement (TA) is this e.g. sole tenant (1 adult & kids)

    Q3 – What date did current TA start 2010

    Q4 – How long was initial fixed term 12 months initially, now rolling on periodic

    Q5 – Does the TA state that rent is due weekly? per calendar month , same date per month

    Q6 – Did the TA require a tenant damage deposit to be paid? paid at start of tenancy in 2010


    Q8 – Does the landlord live in the same property as the tenant?No



    I need some help in unprotecting a deposit. I have agreed in writing with my tenant that the deposit will be surrendered to me to cover historic rent arrears. The rent arrears occured a few years ago when the tenant hit a difficult time, since then the rent has been paid regularly, but the tenant claims (and I believe) that they are not in a position to tackle the rent arrears.
    I am now in the situation where I have agreed and the tenant is more than happy for me to upgrade a sad kitchen. I wish to utilise the deposit against the historic rent arrears and treat this as income in this same tax year as I have the extra expense of the kitchen upgrade.
    The deposit was protected with mydeposits and I tried to unprotect it but I cannot do so without ending the tenancy (according to mydeposits). Even if I offered the tenant a new AST, mydeposits call this a renewal and won't allow for the deposit to be returned. Mydeposits are telling me that the deposit needs to stay protected until the tenant actually leaves, in spite of the fact that my tenant and I are in agreement that the deposit can be used in this way.
    Any way out?

    #2
    Yes: End that tenancy, start a new one no deposit. Loads of paperwork (eg inventory, photos, check-out reports...)

    I'd not agree to what you are planning mind
    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
      yes you cannot unprotect it -
      no matter how nice the tenant is you could end up in a sticky if you touch that money so thats why its protected

      Comment


        #4
        Don't upgrade a kitchen for a tenant in situ. You'll end up like this guy: https://forums.landlordzone.co.uk/fo...tennant-issues

        Comment


          #5
          You can return the deposit to the tenant and they can then pay it to you.
          There isn't really another way to achieve this.

          I don't know if mydeposits supports such a process.
          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


            #6
            Is this custodial or insured?

            Comment


              #7
              This sounds like an error of judgement to me. You may need that deposit to cover damage to the property when they leave. If you take it now you would be leaving yourself vulnerable. I would agree a repayment plan with the tenant, even if it was a smallish amount each month and I wouldn't refurb the kitchen at this point either. If the tenant refuses or genuinely can afford nothing more than the rent, then its surely just a matter of time before he falls behind again.

              Comment


                #8
                Originally posted by MdeB View Post
                Is this custodial or insured?
                insured.

                it may have been an error of judgement at the time of arrears but I had sympathy for the situation and the rent has been regular ever since, so accepting the situation has given me a tenant paying rent on time ever since, with no voids and one who does minor repairs themselves, so going forward the situation is fine.


                Comment


                  #9
                  The error of judgement I was referring to is taking the deposit now to cover the rent arrears.

                  Comment


                    #10
                    Originally posted by redcarnations View Post
                    The deposit was protected with mydeposits and I tried to unprotect it but I cannot do so without ending the tenancy (according to mydeposits).
                    When a deposit protection scheme uses the term "tenancy" the generally do not mean the same thing as a landlord (or the law) means by tenancy.

                    Generally they use the term "tenancy" to mean "the record we have in our computer system for a protected deposit".

                    Originally posted by redcarnations View Post
                    Even if I offered the tenant a new AST, mydeposits call this a renewal and won't allow for the deposit to be returned.
                    You indicated that the deposit is protected under an insured scheme.
                    That means that you hold the deposit, not mydeposits, so mydeposits cannot stop you from doing what you like with the deposit.

                    They are also wrong regarding a new AST.
                    If you grant a new AST with £0 deposit, then the previous tenancy has ended and the money must be apportioned between T and LL as agreed by T.
                    However, that may not be the best approach because it could be seen as you writing off the money owed under that tenancy.

                    Originally posted by redcarnations View Post
                    Mydeposits are telling me that the deposit needs to stay protected until the tenant actually leaves, in spite of the fact that my tenant and I are in agreement that the deposit can be used in this way.
                    They say this because they only understand the mechanics of their system, not tenancy law in general.


                    If you have nothing in writing and signed by the T regarding using the deposit at this time, then I would explain to the T that the law is not as simple as you had thought and the deposit cannot be used in this way during the tenancy (not all true, but T is unlikely to know this)

                    If you have a written and signed agreement, then the only thing that has really changed is that the arrears have been reduced: you had the money all along and it has been allocated to a different pot (which it woud have been allocated to anyway at the end of the tenancy).

                    Comment


                      #11
                      If you have a written and signed agreement, then the only thing that has really changed is that the arrears have been reduced: you had the money all along and it has been allocated to a different pot (which it woud have been allocated to anyway at the end of the tenancy).
                      exactly. I have tenants signed agreement.

                      you seem to be suggesting that the simple way may be to tell mydeposits that the tenancy has ended and therefore their involvement is over. The fact that the tenancy continues shouldn’t be of concern to them.

                      Comment

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