Deposit, or Early Termination Fee.....

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    Deposit, or Early Termination Fee.....

    I've been having a few troubles with my Landlord, which I've discussed in another thread, and it's really made me think that he is not really the professional he made himself out to be.

    I've been reading through my Assured Shorthold tenancy agreement, and noticed a clause which has got me confused.

    I paid my Landlord a months rent plus £100 in advance, which I assumed was a deposit. My contract states that I've paid an Early Termination Fee of £595 (which is the amount I paid upfront) and a Depost of Nil.

    The two clauses regarding this are:

    'Early Termination fee

    The Landlord will arrange for the early termination fee to Be refunded to the Tenant once the Tenant has vacated the property and the end of the Tenancy period provided the required notice has been given in accordance with Clause C1'


    Clause C1 reads like this:

    ' Tenants right of Termination

    The Tenant can terminate the agreement at any time, and will be accepted PROVIDED

    (a) The tenant is not in arrears, and no damage or redoraction is required to the property

    (b) At least one months written notice is provided

    (c) The early termination fee will be retained by the Landlord should the Tenant not remain at the property for the duration of the contract'


    To me, this reads like he will keep the fee if there are arrears or damage, which tells me it is a deposit, not a fee for leaving before the end of my agreement.

    I'm wondering if my Landlord is just tring to circumvent the various DPS schemes that are around in order to wring more cash from his tenants?

    I have been wondering why he was so keen to evict me, and wonder if this is the reason!!!

    #2
    The clause is clumsily worded and you can't be penalised other than your liability to pay rent to when you leave. I think the clause is fairly meaningless in that it couldn't be imposed upon you as it's potentially unfair under the Unfair Terms in Consumer Contract Regulations 1999
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

    Comment


      #3
      Originally posted by Paul_f View Post
      The clause is clumsily worded and you can't be penalised other than your liability to pay rent to when you leave. I think the clause is fairly meaningless in that it couldn't be imposed upon you as it's potentially unfair under the Unfair Terms in Consumer Contract Regulations 1999
      I know very little about what are unfair terms, but surely this is actually a deposit just under a different name and therefore if the housing act requires it, it would be needed to be protected by the TDS.

      Otherwise everyone could just take early termination fees and add in a clause if there is any damage or arrears I will keep the 'termination fee'?

      Kind regards,

      John

      Comment


        #4
        as far as i recall - any money which is "returnable" is classified as a deposit - irrespective of what is called in the Agreement - and should be lodged with a Scheme

        Comment


          #5
          Thank you both for your replies.

          It does seems to me that monies that are returnable are a deposit, I've looked at the Housing Act 2004:

          (8) In subsection (7) “deposit” means a transfer of property intended to be held (by the landlord or otherwise) as security for—

          (a) the performance of any obligations of the tenant, or
          (b) the discharge of any liability of his,
          arising under or in connection with the tenancy.


          I admittedly knows very little about legal stuff, but to me part (b) means that monies held in case I discharge my responsibilities, by terminating my agreement early for example, are classed as a deposit and should be protected.....

          As my Tenancy agreement says:

          (c) The early termination fee will be retained by the Landlord should the Tenant not remain at the property for the duration of the contract'

          Does anyone have any thoughts or experiences with something like this?

          I really do feel my Landlord is just trying to circumvent the legislation!

          Comment


            #6
            I agree with others that it is a deposit in another name, and this would be reinforced if the landlord used it for anything other than the stated purpose, say if you left without early termination but the landlord retained money for damage to property.
            I also post as Moderator2 when moderating

            Comment


              #7
              Agree with all of the above.

              However, if you were to leave your contract early you would be liable for the rent due for the entire contract and not just up until the day you leave. These dues could be taken from your deposit/early termination fee.

              Comment


                #8
                Yes, I agree that the tenant would be liable for the remainder of the contract, although the LL's clause does state that the T can leave with one months notice at any point, although he can keep the 'Termination Fee'.

                However, as I see it that 'fee' is subject to TDS regulations, and whilst he can keep that the T can also get the 3X penalty.

                If the T is actually at the end of the fixed term or in a periodic tenancy then the LL has very little to go on in my opinion.

                Kind regards,

                John

                Comment


                  #9
                  This is something similar to what my LL has done and was almost universally agreed to be dodgy when I asked about it on here. It was suggested in my case that this would be viewed as a deposit, and from the responses I see above it appears as if the same would be the case for you.

                  Comment


                    #10
                    Originally posted by MaverickPropertyManagemen View Post
                    Yes, I agree that the tenant would be liable for the remainder of the contract, although the LL's clause does state that the T can leave with one months notice at any point, although he can keep the 'Termination Fee'.

                    However, as I see it that 'fee' is subject to TDS regulations, and whilst he can keep that the T can also get the 3X penalty.

                    If the T is actually at the end of the fixed term or in a periodic tenancy then the LL has very little to go on in my opinion.

                    Kind regards,

                    John
                    Thanks for your replies everyone.

                    From my research I agree that the fee is subject to the TDS regulations, so I'm thinking of getting some advice on how to start proceedings.

                    It would be interesting to be pointed in the right direction of some case law, I've had no luck as the legislation is relatively new.

                    This landlord has caused me so many problems since I signed the contract, by showing such little consideration not only with my employment situation,

                    http://www.landlordzone.co.uk/forums...ad.php?t=11657

                    but he has also refused to undertake any repairs whatsoever as apparently I'm in breach of contract so that absolves him from any responsibility to carry out works, to harrassing my partner in the street, trying to enter my property, and imposing silly fees.

                    I've read threads about how nice it would be to be able to blacklist tenants who misbehave, it would be nice to do the same to these landlords!

                    Comment


                      #11
                      The term (termination) "fee" refers to money earned by a supplier of services which clearly the landlord has not provided in this instance. A "charge" would have been more appropriate but this could be construed as a penalty clause and therefore potentially unenforceable.
                      The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                      Comment


                        #12
                        Originally posted by Avaya View Post
                        to harrassing my partner in the street
                        well, if your partner isn't a joint tenant, why not get him/her to call up the police next time it happens and say that some nutter is harrassing them on the street?

                        Comment


                          #13
                          Originally posted by Pelican eats pigeon View Post
                          well, if your partner isn't a joint tenant, why not get him/her to call up the police next time it happens and say that some nutter is harrassing them on the street?
                          She isn't a tenant, and she will do that if it happens again!

                          I received some good advice from my Local Authority about his behavior, and I've written to him explaining that it's unacceptable after he tried to push past me in the doorway to 'take possession' as he put it..........

                          Comment


                            #14
                            Sorry to resurrect my old thread from the dead,


                            But my Solicitor has served notice to act on my Landlord today over the Early Termination Fee.

                            The Landlord was advised that as I am in the last month of my tenancy I cannot excercise the privilege of terminating my contract early, so the fee should be returned to myself in at most 7 days as the Landlord has no reason to continue holding it........

                            My Landlord then contacted me, and said he would only return it when I move out, and if the property is in a clean and tidy condition with no damage. he also wanted a receipt to show it had been professionally cleaned.

                            Any thoughts?!

                            Comment


                              #15
                              Originally posted by Avaya View Post
                              ...... he would only return it when I move out, and if the property is in a clean and tidy condition with no damage. he also wanted a receipt to show it had been professionally cleaned.

                              Any thoughts?!
                              Sounds like a deposit to me, he's planning to use it for purposes other than stated in your agreement.
                              I also post as Moderator2 when moderating

                              Comment

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