Avoiding the TDS.

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  • Avoiding the TDS.

    Hello...Im not a fan of the Tennancy Deposit Scheme(Had tennants do a bunk, Served section 8,Won, and they had to follow protocol and it took 30 days to get back,leaving me to have to borrow money to fix up damage.) Anyway next time I rent I want to make an agreement where the tennant gives 2 months rent instead of a deposit. What form is this on ?...How do I go about making my own legal agreement ?.

  • #2
    You don't have to take a deposit but if you do it needs to be protected.

    If you want to claim a deduction from that deposit and the tenant disputes the deduction you don't have to use the arbitration service....you can use the small claims court where some say you will have more chance of success.

    You can take 2 months rent in advance but I don't see the point....chances are your tenant will just not pay the rent for the last 2 months of the tenancy, so you gain nothing.

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    • #3
      If 2 months rent is taken in advance:
      (1) It must state this on the AST.
      (2) If it is not used as rent, and held by the landlord, it will be deemed to be a 'deposit', and landlord will need to protect it (if property is in England or Wales and annual rent less than £25k).

      Originally posted by outragedlondoner View Post
      What form is this on ?...How do I go about making my own legal agreement ?.
      DIY AST's are not a good idea unless you are legally qualified to do so. To get a legally compliant AST, use a specialist solicitor or make enquiries to a landlord's association (NLA/RLA).
      The information in my posts is provided 'as is'. This is not intended to be legal advice. Legal or other professional advice should be sought before acting or relying on this information or any part of it. I will not be held responsible for loss or damage arising from errors in the information or the way in which a person uses the information on this . For more information on your query use the '' link at the top of this page. Agreements, Forms & Notices can be found .

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      • #4
        That sounds good...I dont mind paying 2 months rent upfront and stating it on the tennancy. So Id take the money and pay 2 months mortgage and keep the receipt as proof, thats great as it avoids government snooping on small landlords.

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        • #5
          I gain not using an enforced scheme that was not in existence when I first started renting and that has only caused me problems.

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          • #6
            I believe the 2-month rent rule would prevent you using the deposit for dilapidations etc - ie Tenant trashes your place and you have no useable deposit. If you include any clauses to get around this then you get into the "if it smells like a deposit - it is a deposit" arena.

            You could get your Ts to use an insurance based scheme where they pay a monthly premium and you claim, if you need to, at the end of the tenancy. This would avoid deposit protection.

            Comment


            • #7
              I do the following......
              1. I take rent guarantee insurance &/or
              2. A guarantor &
              3. I take a deposit &
              4. I resolving to take any deposit dispute thru the small claims court rather than the deposit protection adjudication process.

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              • #8
                Hello...I understand one,two and three but four ?.
                How does 4 avoid the TDS. Where do you keep the deposit then ?.
                Is there a form to fill in stating this and thus keeping the TDS bods happy ?.

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                • #9
                  If there was a dispute with the deposit you would need to return the protected deposit in full to the tenant and then raise a claim thru the small claims court for the amount in dispute.

                  Of course with your detailed inventories, photographic evidence and invoices / reciepts you would expect to win or you wouldn't have initiated the action in the first place.

                  Good luck.

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                  • #10
                    Originally posted by outragedlondoner View Post
                    I gain not using an enforced scheme that was not in existence when I first started renting and that has only caused me problems.
                    You are not supposed to gain from your tenants' deposits.
                    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                    • #11
                      Originally posted by outragedlondoner View Post
                      had to follow protocol and it took 30 days to get back,leaving me to have to borrow money to fix up damage. Anyway next time I rent I want to make an agreement where the tennant gives 2 months rent instead of a deposit.
                      Example scenario: Mr Smith takes a six month AST. He pays you 2 months rent in advance instead of a deposit. Therefore, he pays you the equivalent of 3 month's rent on day 1, the 1st rent day.

                      2nd rent day: Mr Smith pays rent (total 4 months)
                      3rd rent day: Mr Smith pays rent (total 5 months)
                      4th rent day: Mr Smith pays rent (total 6 months)
                      5th rent day: Mr Smith doesn't pay rent. You phone him asking after your rent and he says, I'm going at the end of the fixed term, I'm fully paid up.
                      6th rent day: No rent.

                      At the end of the six month term, Mr Smith leaves with no rent arrears. However, you find he has damaged the property. You are forced to borrow money to cover these costs pending court claim against Mr Smith.

                      Not sure how this is an improvement on deposit protection, especially if Mr Smith disappears without trace, in which case you won't even get the deposit money.

                      Comment


                      • #12
                        Originally posted by outragedlondoner View Post
                        Hello...Im not a fan of the Tennancy Deposit Scheme(Had tennants do a bunk, Served section 8,Won, and they had to follow protocol and it took 30 days to get back,leaving me to have to borrow money to fix up damage.) Anyway next time I rent I want to make an agreement where the tennant gives 2 months rent instead of a deposit. What form is this on ?...How do I go about making my own legal agreement?
                        Whichever way you are trying to avoid TDS, the legislation has already anticipated this scenario. As Westminster states there is no advantage to you as you don't have a deposit, just rent a month in advance of when it should normally be due.
                        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


                        • #13
                          You may find this thread useful. It was my first post too!:

                          http://www.landlordzone.co.uk/forums...ad.php?t=20093

                          You do have the ption to use an SAT rather than an AST (which means you don;t need to protect the deposit. HOWEVER, an SAT deprives you of using the s.21 accelerated eviction procedure.

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