AST- any maximum amount of deposit?

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    AST- any maximum amount of deposit?

    Is there a legal maximum deposit that I can ask for?

    If I were to ask for 2 or 3 months, does that change the nature of the tenancy or position of the tenants?

    #2
    Yes! You cannot ask for more than the equivalent of 2 months rent otherwise you could be creating a premium lease which would give the tenant potential rights of a continued occupation. Housing Act 1988 S.15 (4)(c)
    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
      Yes! You cannot ask for more than the equivalent of 2 months rent otherwise you could be creating a premium lease which would give the tenant potential rights of a continued occupation. Housing Act 1988 S.15 (4)(c)
      1. That's not quite what s.15(4)(c) says.

      2. Yes, it does define as "premium" a deposit exceeding one-sixth of annual rent.

      3. However, that definition applies only for s.15(3)(b).

      4. So:
      a. s.15(1) states that, subject to s.15(3), every periodic AST/SAT (whether a statutory continuation or explicitly created as such from day1) impliedly prohibits assignment and subletting, and [by s.15(2)] s.19 of LTA 1927 then does not apply; and
      b. if the AST/SAT is created as explicit periodic from day1, there is [by s.15(3)] no such implied prohibition if:
      i. the Agreement contains an explicit prohibition to like effect; or
      ii. the Agreement reserves a premium, whether a real one or merely a larger deposit deemed a premium by s.15(3)(c).

      5. Result: yes, L can reserve a deposit exceeding two months' rent.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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        #4
        But does that mean if youve paid a one months deposit and 3 months rent up front you can sublet (even if the AST explicitly forbids it)?

        Comment


          #5
          Originally posted by notchuffed View Post
          But does that mean if youve paid a one months deposit and 3 months rent up front you can sublet (even if the AST explicitly forbids it)?
          Section 15 of HA 1988 relates only to an AST created as periodic from day1 and applies only where there is no explicit prohibition.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Originally posted by jeffrey View Post
            (unless s.19 of LTA 1927 mitigates its effect)
            ok thanks

            but what does that last bit in brackets mean please? and how would i know if its applicable?

            Comment


              #7
              Originally posted by notchuffed View Post
              What does that last bit in brackets mean please? and how would i know if its applicable?
              Here's the chapter and verse! I've added underlinings to highlight salient bits.

              19. Provisions as to covenants not to assign, &c. without licence or consent.

              (1) In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against assigning, underletting, charging or parting with the possession of demised premises or any part thereof without licence or consent, such covenant condition or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject:

              (a) to a proviso to the effect that such licence or consent is not to be unreasonably withheld, but this proviso does not preclude the right of the landlord to require payment of a reasonable sum in respect of any legal or other expenses incurred in connection with such licence or consent; and

              (b) (if the lease is for more than forty years, and is made in consideration wholly or partially of the erection, or the substantial improvement, addition or alteration of buildings, and the lessor is not a Government department or local or public authority, or a statutory or public utility company) to a proviso to the effect that in the case of any assignment, under-letting, charging or parting with the possession (whether by the holders of the lease or any under-tenant whether immediate or not) effected more than seven years before the end of the term no consent or licence shall be required, if notice in writing of the transaction is given to the lessor within six months after the transaction is effected.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Thanks

                So permission to sublet "cannot be reasonably" refused. But I would have to pay any legal costs?

                Comment


                  #9
                  Originally posted by notchuffed View Post
                  Thanks

                  So permission to sublet "cannot be reasonably" refused. But I would have to pay any legal costs?
                  Anyone? Please help.

                  Comment


                    #10
                    Originally posted by notchuffed View Post
                    So permission to sublet "cannot be reasonably" refused. But I would have to pay any legal costs?
                    Yes. See this bit again, culled ffrom my previous post #7. Did you not notice it?

                    but this proviso does not preclude the right of the landlord to require payment of a reasonable sum in respect of any legal or other expenses incurred in connection with such licence or consent
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment

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