Tenants in my flat - no AST, no deposit

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  • Tenants in my flat - no AST, no deposit

    Hi

    Apologies for any lapses in forum etiquette - I am new to this, and I'm afraid I have been very naive, and now am looking for some advice on how to proceed.

    I have had tenants in my flat on an AST through a letting agent for the past 6months. There have been various maintenance issues while they have been there, and when the letting agent has bothered to inform me about them, I have made every effort to resolve them. However, last month the tenants gave a month's notice, which would have had them moving out yesterday.

    During this past month I have unfortunately had a major disagreement with the agent and our relationship came to a premature end, meaning that I have been dealing with the tenants directly. During our communications, they have said that actually, as long as I make a commitment to resolve any outstanding maintenance problems as soon as possible, they would like to stay, and sign another 6 month AST. I was happy with this, and after having laid out in writing my plans to solve the problems over coming weeks, I went to the flat yesterday to sign the new tenancy with them. When I got there, they announced that they would not be able to pay a deposit as it has not yet been returned to them by the agent (it is expected this week) and said that they would pay it as soon as possible, but that also, they weren't happy to sign a new contract until they knew exactly what repairs I am prepared to make and when I will be having them carried out. I have explained to them that until I have had professionals assess the situation (which I aim to do within the next 2 weeks) I can't really do this. After much (fairly amicable) discussion, I have found myself leaving the flat with this month's rent in cash, but no deposit and nothing signed by the tenants.

    Having slept on it, I have realised that I am potentially entering into a really problematic relationship here - where, if any contract is to be signed, it is going to have to include a break clause - leaving me with no security and the threat of large expenditure to desperately try and keep my tenants there.

    If I now decide not to renew any contract, and to issue them notice today, where do I stand (ie, how much notice does it have to be? How much trouble have I got myself in by not having anything signed by them?)?

    I expect a certain level of derision for my stupidity, but please try and be gentle...

  • #2
    You should realise that you are responsible for the deposit they paid to the agents. If it's not paid back then you will have to refund it anyway.
    Are you sure it is in a protection scheme? If it's not you are open to a claim for a 3x penalty, also, until it is protected you cannot use a S21 to tell the tenants to leave.

    Why do you want to put a break clause into a 6 month contract? You may as well allow the tenancy to enter into a statutory periodic tenancy where the tenant must give you one months notice and you would have to give the tenant two months notice.

    You should not allow the agent to return the deposit to them until you have possession of the property and have carried out a thorough inspection and agreed any dilapidations with the tenant.
    I offer no guarantee that anything I say is correct. wysiwyg

    Comment


    • #3
      When a fixed term AST expires, and the tenant remains in occupation, a statutory periodic tenancy automatically arises - no further paperwork required for this. The terms of the tenancy remain the same as in the fixed term contract, except for giving notice - in a periodic tenancy, when rent is paid monthly, the T must give LL at least one month, the LL must give T at least two months (in the form of a s.21 notice).

      Also, in a periodic tenancy, the notice must expire at the end of a rental period - these periods begin the day after the fixed term expired; for example, if the fixed term expired 15th Feb, then the periods would run 16th - 15th of the month, and your notice would have to expire and seek possession after 15th of the month (as well as giving T at least two months).

      There is no need to re-protect the deposit if the tenancy rolls into a periodic tenancy. But if you sign a new contract, then the existing/original deposit must be re-protected and the prescribed information given again - the tenant doesn't have to pay another new deposit.

      As jta points out, a s.21 notice is not valid if the deposit isn't protected by a scheme.

      Comment


      • #4
        Are we sure that the letting:
        a. is of a property in England & Wales;
        b. has a rate of rent not exceeding £25 000 per year; and
        c. does not involve a resident L?
        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


        • #5
          Originally posted by jeffrey View Post
          Are we sure that the letting:
          a. is of a property in England & Wales;
          b. has a rate of rent not exceeding £25 000 per year; and
          c. does not involve a resident L?
          Jeffrey,
          a. Yes
          b. Yes
          c. Yes

          Comment


          • #6
            OK. These are points usually assumed but occasionally overlooked in error!
            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


            • #7
              Originally posted by jeffrey View Post
              OK. These are points usually assumed but occasionally overlooked in error!
              And there was me hoping that maybe it was going to mean that my situation didn't look quite so dire...

              Comment


              • #8
                Originally posted by k78 View Post
                And there was me hoping that maybe it was going to mean that my situation didn't look quite so dire...
                Your situation isn't dire at all What are you worried about? The tenants are either there on a fixed term AST or a statutory periodic tenancy - either way, there is a valid contract in place, and a deposit has been paid.

                The only possible problem is if you or the agent haven't protected the deposit, but even then, it's easy to solve. Just protect it late with the DPS (the custodial protection scheme, http://www.depositprotection.com/ ) and, just as important, provide T with the prescribed information (keep copy and proof of posting). A recent high court case - Draycott & Draycott -v- Hannells Letting Limited [2010] EWHC 217 (QB) - ruled that the penalty cannot be applied if the deposit has been protected late with the DPS.

                Comment


                • #9
                  Yes, sorry, the situation seems worse from where I am sitting because, to add to it, my boyfriend and I are selling the house that we are living in at the moment. Only today have the purchasers at the bottom of the chain mentioned that they need to complete on Friday as they have given notice on their flat and they are expecting a baby imminently, so we are feeling pressured to give in to their demands to avoid losing our sale.

                  As my tenants were unwilling to commit to my flat in its current condition, I had started to hope that perhaps they would be prepared to leave at the end of the month meaning that we could move in there as a stopgap. I had foolishly thought that the fact that we hadn't signed the contract might mean that I only had to give them one month's notice rather than two...I had no idea about the threat of the unprotected deposit, and to be honest, the letting agent who provided me with these tenants in the first place is so inept, it wouldn't surprise me in the slightest if it is never returned, and I then find myself liable.

                  I'm sorry, it's not been a great day. I've just had a message from my boyfriend to say that even now, at 5pm on Monday, no one in our chain can confirm whether we need to vacate our house on Friday. I give up.v

                  Comment


                  • #10
                    You're under a lot of stress from the house sale side of things - fair enough, but you need to address the flat rental issues separately, and be practical about it instead of collapsing in a heap of despair.

                    With the rental, what you first need to do is contact the agent and find out what they've done with the deposit. If they haven't protected it in a scheme - one of these
                    http://www.direct.gov.uk/en/TenancyDeposit/DG_066391
                    - then ask them to send it to you.

                    Meanwhile, (and this is assuming the agent hasn't protected the deposit) protect the deposit amount (out of your own money) in the DPS linked to in my previous post, and send the T the prescribed information, which you can find a template for here
                    https://www.depositprotection.com/Pu...AgentInfo.aspx
                    Keep a copy and get proof of posting.

                    Remember, you cannot serve a s.21 notice on T unless the deposit is protected. And if the deposit isn't protected T may sue you for non-compliance, with a potential penalty of 3x the deposit. That's why it's important to ensure that the deposit is protected. If you sign a new AST with the T, then the deposit has to be re-protected and the prescribed info re-sent.

                    There is nothing to stop you asking the T if he's willing to move out early - i.e. agree an early surrender. You would need to get a solicitor to draft a deed of surrender for this.

                    Is the agent a member of a professional body such as ARLA?
                    http://www.arla.co.uk/

                    Comment


                    • #11
                      Hi Westminster

                      Thanks for such patient, comprehensive advice. I wish I could currently think straight and then I might be able to make the most of it!

                      Regarding the agent (with whom I am really no longer on good terms at all), their website states that they are members of:

                      "the National Association Of Estate Agents ( NAEA ), Ombudsman Of Estate Agents ( OEA ), Office Of Fair Trading ( OFT ), Data Protection Act ( DPA )(!?!)"

                      but no mention of ARLA...

                      I will contact my tenant this evening for an update on the status of the deposit.

                      Just to throw the cat among the pigeons, with the exchange and completion on our house looking more and more precarious, I am now questioning how sensible it is to hastily bring this tenancy to an end...what would be the necessary steps at this stage if I decide to agree to the tenants' requests and agree for them to stay? I really don't want to mess the tenants about, but I'm aware that currently my circumstances are so unsure that if I'm not careful they're going to get caught up in the mix.

                      With thanks again for your patience and your invaluable input...

                      Comment


                      • #12
                        Originally posted by k78 View Post
                        Regarding the agent (with whom I am really no longer on good terms at all), their website states that they are members of:

                        "the National Association Of Estate Agents ( NAEA ), Ombudsman Of Estate Agents ( OEA ), Office Of Fair Trading ( OFT ), Data Protection Act ( DPA )(!?!)"

                        but no mention of ARLA...
                        NAEA have a code of conduct, (as well as 'Client Money Protection' - see http://www.naea.co.uk/help/# ), so there's a good chance the agent did protect the deposit. Ask the agent about it; and either get details of the protection scheme/reference number etc, or ask them to hand over the deposit to you for protection. If they are uncooperative, complain to NAEA.

                        I am now questioning how sensible it is to hastily bring this tenancy to an end...what would be the necessary steps at this stage if I decide to agree to the tenants' requests and agree for them to stay?
                        Assuming the fixed term has ended, the tenancy is now a statutory periodic tenancy. You have two options:

                        1) Allow the tenancy to continue on a monthly/periodic basis until one of you serves notice.*
                        2) Agree a schedule of repairs and sign a new fixed term contract. Note that this would also require you to re-protect the deposit for the new tenancy.

                        * Terms of the periodic tenancy remain the same as the original contract except for notice. T must give at least 1 month notice to LL; LL must give at least 2 months notice to T. The notice must also expire at the end of a rental period. The periods begin the day after the fixed terms expired; for example, if it expired on 23rd Feb, then the periods would run 24th - 23rd of the month, and your notice would therefore have to seek possession after the 23rd of the month (as well as giving at least two months). See this link. Remember, you cannot serve a s.21 notice unless the deposit is protected.

                        Also note that, regardless of whether you want to do the repairs or not, you have statutory repairing obligations as a landlord. This covers basic necessities such as keeping the boiler/central heating in repair. More info in this link and this link.

                        Comment

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