Should I Let Tenancy Run On?

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  • Should I Let Tenancy Run On?

    I have let my flat on a 6 month AST which expires 25th Feb. Originally I let it to a couple, who have since split up, leaving just the woman living there with her young child. She is in receipt of HB. The rent is in arrears by just under one month's rent, and I have agreed that she can pay this back at £20 per month.
    As the rent is in arrears, should I allow the tenancy to run on, and is this called a periodic tenancy? What happens if I do this as both their names are on the tenancy agreement, but he is no longer living there. I'm assuming if I do this, they are both liable for the arrears, which would be in my tenant's interest as she is currently negotiating maintenance payments from him.
    Another aspect of this is that she is due to pay me a deposit on 25th, the reason being that when they took on the tenancy, a 6 month rent guarantee agreement was in place from an agency who placed them with me. The understanding was that when this expired, the tenants would pay a me a deposit which I would then put into the right scheme.
    I was originally planning on starting a new agreement because they would be paying their deposit 6 months after they first moved in.
    Now I don't know how I would stand legally and which option I should take.
    I've heard there are 2 different types of schemes to hold tenant's deposits, if anyone could point me in the right direction of some more info. on these, I would be very grateful.

  • #2
    Originally posted by Dann View Post
    I have let my flat on a 6 month AST which expires 25th Feb. Originally I let it to a couple, who have since split up, leaving just the woman living there with her young child. She is in receipt of HB. The rent is in arrears by just under one month's rent, and I have agreed that she can pay this back at £20 per month.
    No problem with this, if arrears are paid off*.

    Originally posted by Dann View Post
    As the rent is in arrears, should I allow the tenancy to run on, and is this called a periodic tenancy?
    Yes, a statutory periodic tenancy begins the day after the fixed period ends.

    Originally posted by Dann View Post
    What happens if I do this as both their names are on the tenancy agreement, but he is no longer living there.
    If it's a joint tenancy, both tenant's are jointly and severally liable.

    Originally posted by Dann View Post
    Another aspect of this is that she is due to pay me a deposit on 25th, the reason being that when they took on the tenancy, a 6 month rent guarantee agreement was in place from an agency who placed them with me. The understanding was that when this expired, the tenants would pay a me a deposit which I would then put into the right scheme.
    No need to sign a new AST, just protect the deposit in one of the three government approved schemes (if annual rent is less than £25k), and give the tenant the prescribed information.

    * Note: If payment plan for arrears is not kept or deposit is not paid as agreed, one option would be to serve a s.21 notice.

    Above advice assumes tenancy is an AST in England or Wales.
    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 .

    Comment


    • #3
      If T remains in occupation after the end of a fixed term assured shorthold tenancy in England/Wales, a statutory periodic tenancy is automatically created. Exactly the same terms as the original contract, except for notice. Both joint tenants remain individually and jointly liable for all the rent, regardless of one moving out.

      As T is in arrears, you need to decide whether you want T out. If yes, serve a s.21 notice. See
      http://www.letlink.co.uk/letting-fac...d-tenancy.html

      It makes no difference whether the deposit is paid pre- or mid-tenancy. What is essential is to secure clear evidence of when the deposit was paid, to protect it, and to provide the tenant with the prescribed information (and get proof of posting of this).

      Your best bet is probably to use the free custodial scheme, the DPS. Mind you, I very much doubt the T will pay the deposit given that she's already struggling to pay the rent. I don't understand how it came about that T didn't pay a deposit up front, but for the future, always get rent and deposit in advance.

      More info here.
      http://www.direct.gov.uk/en/TenancyDeposit/DG_066391

      Note that, if a deposit is paid, it must be protected before you can serve a valid s.21 notice.

      Also note that, even if T only pays part of the agreed deposit, that sum must be protected. Any money held as security must be protected.

      Comment


      • #4
        Many thanks for that useful advice. How does notice differ for a periodic tenancy?
        I have just checked my account and seen that the deposit has already cleared. She is a good tenant, so I want her to stay, and am happy to accept £20 per month to clear arrears.

        Comment


        • #5
          Originally posted by Dann View Post
          Many thanks for that useful advice. How does notice differ for a periodic tenancy?
          I have just checked my account and seen that the deposit has already cleared. She is a good tenant, so I want her to stay, and am happy to accept £20 per month to clear arrears.
          If a fixed-term AST becomes a statutory periodic continuation tenancy, no new deposit protection is needed (unless a new deposit is paid).
          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
            If a fixed-term AST becomes a statutory periodic continuation tenancy, no new deposit protection is needed (unless a new deposit is paid).
            Which in this case it has, the original deposit was some sort of Local Authority gaurantee scheme by the sounds of it.

            With regards to letting the tenancy go periodic, thats up to you, do you want the security of having a gauranteed tenant for six months or do want the flexibility of being able to take possesion at two months notice.
            As her financial situation has changed why not let it run for a couple of months and if all is well then offer her a new fixed term tenancy.

            Comment


            • #7
              Deposit now sorted out.
              I'm getting HB payments direct to me, so not worried about receiving rent on time. Would prefer to keep this tenant as she is reliable even though in arrears which is about £600. Rent is £850 pcm. I'm happy with repayment plan, it's less hassle and less risky to accept arrears than change tenant.
              Have now informed T of SPT, and am about to put deposit in scheme.
              I'm still not clear on how the notice is different for a SPT compared to AST. If it was a 6 month AST, does this mean tenant is committed to tenancy for first 6 months? I know she's settled there and is in no rush to leave.
              Her previous partner is still jointly liable for arrears, so I didn't think I could easily do a new AST anyway.
              Under a SPT, how much notice does each party have to give the other?
              Thanks.

              Comment


              • #8
                Originally posted by Dann View Post
                Under a SPT, how much notice does each party have to give the other?
                Thanks.
                Assuming rent is payable monthly, LL must give T at least two full months' notice (of requirement to possess), via a section 21 notice, to end on last day of a rent payment period.

                T must give LL at least one full month's notice (of their intention to end the tenancy), to end on last day of a rent payment period.

                (LL may however give fourteen' days notice via a section 8 notice if T has breached conditions of tenancy e.g. by not paying rent).
                '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

                Comment


                • #9
                  yes you are both committed to any fixed term you both sign up for, the tenant can leave at the end of the fixed term with no notice and the LL must give two months notice.
                  Under an SPT its as MTG says above.

                  Comment


                  • #10
                    Originally posted by mind the gap View Post
                    Assuming rent is payable monthly, LL must give T at least two full months' notice (of requirement to possess), via a section 21 notice, to end on last day of a rent payment period.
                    Yes. It's a Notice under s.21(4)(a).

                    Originally posted by mind the gap View Post
                    (LL may however give fourteen' days notice via a section 8 notice if T has breached conditions of tenancy e.g. by not paying rent).
                    Not quite. Some s.8 grounds demand two months' Notice; some- mostly re rent- demand two weeks'; and one (g14) does not need any Notice period because, once L's served, proceedings can be instituted at once.
                    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


                    • #11
                      Originally posted by jeffrey View Post
                      Yes. It's a Notice under s.21(4)(a).


                      Not quite. Some s.8 grounds demand two months' Notice; some- mostly re rent- demand two weeks'; and one (g14) does not need any Notice period because, once L's served, proceedings can be instituted at once.
                      I agree. I was trying to keep it simple and was thinking of ground 8. Apologies.
                      '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

                      Comment


                      • #12
                        Query re. DPS.

                        I am about to register the deposit with the DPS. The tenancy agreement is now a SPT, but one of the original tenants has moved out since I first issued the 6 month AST on 25/08/09. When registering the deposit, should I do this in both tenants names, even though one of them named on the agreement is no longer living there (but is still jointly liable for the arrears)?
                        The tenant who is still living there is the one who has paid me the deposit.
                        Thanks.

                        Comment


                        • #13
                          Originally posted by Dann View Post
                          I am about to register the deposit with the DPS. The tenancy agreement is now a SPT, but one of the original tenants has moved out since I first issued the 6 month AST on 25/08/09. When registering the deposit, should I do this in both tenants names, even though one of them named on the agreement is no longer living there (but is still jointly liable for the arrears)?
                          The tenant who is still living there is the one who has paid me the deposit.
                          Thanks.
                          You register the deposit against the tenancy, not against an individual - the tenancy agreement names two tenants, so you name two tenants as 'the Tenant' for deposit protection purposes. Same applies to giving notice.

                          Remember that just because one person has moved out, it doesn't end or affect the original contract/tenancy; both tenants are still 'the Tenant', both are still liable for rent, etc.

                          Comment


                          • #14
                            Thanks for that useful bit of advice. I have transferred the funds to the DPS via bank transfer, but there was no information about what I should notify my T of. I remember seeing somewhere a list of things I was supposed to write to T about and inform them of things re. the deposit protection sheme. I couldn't find anything about this during the payment process.

                            Comment


                            • #15
                              Notifying T of deposit scheme

                              Hi again,

                              Could anyone point me in the right direction of the information I am supposed to include when I write to T about having put her deposit in the deposit scheme,
                              Thanks very much.

                              Comment

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