2006 AST, renewed but deposit not protected, s.21 valid?

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  • 2006 AST, renewed but deposit not protected, s.21 valid?

    I'm posting this on behalf of another landlord, bsx043, as we've been discussing it at the bottom of the high court case thread, so the question might be missed.

    Background: AST signed in 2006, renewed fixed terms in 2007 and 2008. Deposit not protected on renewal. Now periodic. T owes four months' rent. Agent has served s.21 notice, believing protection of deposit not required, (and advising LL that s.21 preferable to s.8 as T may defeat the latter by various means).

    Now, we all know that it is advisable to protect the deposit in these circumstances as the statute is generally interpreted to mean that the deposit is re-received with a renewal. Nevertheless, the statute isn't crystal clear on this issue, and there is no high court decision on the matter, so it's still open to argument. See my post on the other thread.

    Question is, what effect might this have on accelerated possession procedure/form N5b? Could the tenant, in theory, raise the issue and possibly defeat the application (depending on the judge's interpretation of the statute)?

    Also, while the LL intends to protect the deposit now he realizes the mistake, he's reluctant to delay things further by re-serving another s.21 post protection. What's the best way forward;
    1. cross fingers that no-one will question the validity of the first s.21
    2. serve a s.8 notice and follow up with s.8 route for possession
    3. protect the deposit, serve a s.8 and a new s.21, follow up with s.8 route, failing which use s.21 route?

  • #2
    Originally posted by westminster View Post
    I've never had to fill in a form N5b, so can't help you there - but it's possible that the tenant could argue the S.21 notice was invalid at the possession hearing, and I would imagine it's also possible the judge might accept the argument.
    There is no court hearing under the accelerated procedure, unless the tenant requests one; and the Judge agrees.

    Originally posted by westminster View Post
    Question is, what effect might this have on accelerated possession procedure/form N5b? Could the tenant, in theory, raise the issue and possibly defeat the application (depending on the judge's interpretation of the statute)?
    Any astute Judge would throw the claim out, as N5B has sections for tenancy renewals, and the claimant's (landlord's) submission to the Court should include any relevant documents to support the claim, e.g. AST, proof of deposit protection, s.21 and proof of s.21 service.

    Originally posted by westminster View Post
    1. cross fingers that no-one will question the validity of the first s.21
    2. serve a s.8 notice and follow up with s.8 route for possession
    3. protect the deposit, serve a s.8 and a new s.21, follow up with s.8 route, failing which use s.21 route?
    3. is the best option.
    1. is a definite no.
    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
      Thanks, Tom. I really wasn't sure what to advise.

      Originally posted by tom999 View Post
      Any astute Judge would throw the claim out, as N5B has sections for tenancy renewals, and the claimant's (landlord's) submission to the Court should include any relevant documents to support the claim, e.g. AST, proof of deposit protection, s.21 and proof of s.21 service.
      In the other thread, the LL says:

      Originally posted by bsx043 View Post
      In Form N5b, it states (7B(d)) that “if your claim for possession is in relation to an Assured Shorthold Tenancy where a deposit was taken after 6 April 2007, you must provide evidence that such deposit is safeguarded with a tenancy deposit scheme (TDS)....”. The agent says that this does not apply in my case, since the deposit was taken before this date and the new tenancy agreement has replaced the first tenancy agreement for the same premises and with the same landlord and tenant (clause 6 of the form applies). As far as I can see, there is nothing in form N5b that seems to indicate that my application would be invalid.
      I'm just quoting as I am not familiar with the form or the procedure.

      But that aside, I take it that your comment about an "astute" judge implies that you think (as I do) that deposit protection applies for renewals after 6th April 2007?

      My interest in the issue is that, because the statute doesn't make it crystal clear, how are LLs supposed to know what they are meant to do? Obviously, a sensible LL would cover himself by protecting the deposit, but...

      Comment


      • #4
        Hi Guys! Have, as always, been reading your comments with interest. On the DPS website, under legislation, it states that deposits taken before 6th April 2007 do not have to be protected by a government scheme, however, as an existing tenancy is renewed and the Landlord agrees a new fixed-term tenancy,the initial deposit taken must then be lodged with a tenancy deposit protection scheme. Does that not imply that it is the law?
        Many thanks

        Comment


        • #5
          Originally posted by westminster View Post
          I take it that your comment about an "astute" judge implies that you think (as I do) that deposit protection applies for renewals after 6th April 2007?
          If a renewal tenancy means that a new tenancy agreement is issued.

          Originally posted by bsx043 View Post
          In Form N5b, it states (7B(d)) that “if your claim for possession is in relation to an Assured Shorthold Tenancy where a deposit was taken after 6 April 2007, you must provide evidence that such deposit is safeguarded with a tenancy deposit scheme (TDS)....”. The agent says that this does not apply in my case, since the deposit was taken before this date and the new tenancy agreement has replaced the first tenancy agreement for the same premises and with the same landlord and tenant (clause 6 of the form applies). As far as I can see, there is nothing in form N5b that seems to indicate that my application would be invalid.
          Here's section 6 of Form N5B:
          "6. Whenever a new tenancy agreement has replaced the first tenancy agreement or has replaced a replacement tenancy agreement,
          a) it has been of the same, or substantially the same, premises, and
          b) the landlord and tenant were the same people at the start of the replacement tenancy as the landlord and tenant at the end of the tenancy which it replaced."

          The accompanying N5B notes say that section 6 should only be deleted if there has been the one tenancy.

          I'd advise 'bsx043' to take legal advice, if he/she is unsure, and not rely on agent.
          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


          • #6
            Originally posted by irishgem1 View Post
            Hi Guys! Have, as always, been reading your comments with interest. On the DPS website, under legislation, it states that deposits taken before 6th April 2007 do not have to be protected by a government scheme, however, as an existing tenancy is renewed and the Landlord agrees a new fixed-term tenancy,the initial deposit taken must then be lodged with a tenancy deposit protection scheme. Does that not imply that it is the law?
            Many thanks
            No, is the short answer. The DPS doesn't dictate the law. What they say on

            https://www.depositprotection.com/pu...gislation.aspx

            is their interpretation. And it's good advice to landlords given the uncertainty - best to err on the side of caution.

            Read the actual statute, i.e. the law, and you'll see it is open to interpretation.
            http://www.opsi.gov.uk/ACTS/acts2004..._en_19#pt6-ch4

            Also, here's a case where two different judges took two different views.
            http://nearlylegal.co.uk/blog/2010/0...tenancy-again/

            Comment


            • #7
              Westminster, thank you!

              Comment


              • #8
                Thanks to Westminster for posting this thread. The situation I am facing at the moment is heads I lose, tails I lose. Maybe win later.

                Here’s my predicament:

                EITHER

                Demand that agent protects T deposit which he holds and serve s21 again.
                Meanwhile I serve the S8 notice, and proceed on that basis

                OR

                Let him Submit Form N5b and documents on Monday and expect it to fail, then sue him for litigation later. I am supposed to be the dump one though.


                Do I have a better choice other than first above? I am not a lawyer but an academic who understands how to respect the law better than scrupulous businesspeople. Thanks for enlightening me on this issue anyway.

                Comment


                • #9
                  Originally posted by bsx043 View Post
                  Demand that agent protects T deposit which he holds and serve s21 again.
                  You don't necessarily need to rely on the agent for this. You could pay the deposit amount into the DPS yourself, send the T the prescribed information (NB keep copy and get proof of posting in the form of a free certificate of posting - essential), and get the money back from the agent afterwards.

                  Let him Submit Form N5b and documents on Monday and expect it to fail, then sue him for litigation later.
                  I would go with tom999's advice on this.

                  Comment


                  • #10
                    Thanks for all the information. Maybe I should seek legal advice, as Tom999 suggests, on the technicality of section 6 in Form5Nb. Are there any cases here or elsewhere where such actions on the s21 route have succeeded or failed?


                    On the other hand, Tom999 confirms your option 3 which, after reflecting overnight, I may decide to follow. I am not rushed for possession, although I thought the quicker the better to cut losses short. The next thing, at least for now, is to protect T deposit, issue s8 and new s21 with TDS confirmation, etc.

                    Comment


                    • #11
                      Originally posted by bsx043 View Post
                      On the other hand, Tom999 confirms your option 3 which, after reflecting overnight, I may decide to follow. I am not rushed for possession, although I thought the quicker the better to cut losses short. The next thing, at least for now, is to protect T deposit, issue s8 and new s21 with TDS confirmation, etc.
                      You must use the DPS to ensure you are protected against a claim for non-compliance.

                      http://www.depositprotection.com/

                      Do not use one of the two other schemes (i.e. TDS & mydeposits).

                      Also, are you clear on the requirements for a s.21 notice for a periodic tenancy? See this link.

                      Comment


                      • #12
                        Originally posted by bsx043 View Post
                        Maybe I should seek legal advice, as Tom999 suggests, on the technicality of section 6 in Form5Nb.
                        You should delete S6 of N5b only if there has been no other ASTs signed since first one was issued. As long as there's another AST signed by same person(s), you must leave that section in.

                        Originally posted by bsx043 View Post
                        The next thing, at least for now, is to protect T deposit, issue s8 and new s21 with TDS confirmation, etc.
                        That is the correct/best option.

                        Unfortunately, the law did not clarify the situation for tenancy renewal where deposits were taken prior to Apr07 and new ASTs signed after that.

                        Whilst the statute says deposits received after Apr07, the concensus is that it applies to renewals, as technically, a deposit has been taken for the contract, even though the no "new" money changed hands.

                        Comment


                        • #13
                          Thanks about the DPS.

                          About the s21(4)(a) Notice: According to the expired one-year fixed-term AST, rent payable in equal monthly payments on the 15th of each month. Therefore the date of expiry on the notice should be after 14th May 2010, and dated on (or before) 15th March 2010 ?

                          Next, landlord's address on the AST is c/o Agent's address. Should I have the same address or change it to my home address.

                          Also, is there a link on website where I can freely download s21 and s8 notices, perhaps in word/writable format rather than pdf ?

                          Comment


                          • #14
                            Originally posted by bsx043 View Post
                            About the s21(4)(a) Notice: According to the expired one-year fixed-term AST, rent payable in equal monthly payments on the 15th of each month. Therefore the date of expiry on the notice should be after 14th May 2010, and dated on (or before) 15th March 2010 ?
                            Periods start on the day after the fixed term expired (which may or may not coincide with the rent-due-day). So if the last day of the fixed term was the 14th of the month, then the periods would run 15th - 14th of the month and yes, the notice should seek possession after 14th May. Allow 2-3 days for postal delivery, i.e. post by the 12th to be sure notice is served by the 15th. Keep a copy and get a free certificate of posting. (Unless perhaps the contract specifies that notices must be served using a signed for service - does it? - but signed for services can be refused or returned undelivered).

                            Next, landlord's address on the AST is c/o Agent's address. Should I have the same address or change it to my home address.
                            Don't know.

                            Also, is there a link on website where I can freely download s21 and s8 notices, perhaps in word/writable format rather than pdf ?
                            Landlordzone has them.
                            http://www.landlordzone.co.uk/agreements.htm

                            Also, there are various landlord associations/websites you can join for a small annual fee and get such things and advice on them.

                            e.g.
                            http://www.landlordlaw.co.uk/pagedet...396&page=non#1
                            http://www.landlords.org.uk/archive/...factsheets.htm

                            Comment


                            • #15
                              I have two more questions:

                              1. Before putting the deposit (equivalent to one month’s rent) on the TDS scheme, I need advice on how best to recover it, and what the procedure is. Tenant is owing over 4 month’s unpaid rent, which he is unlikely to pay. Furthermore, he has breached tenancy terms by displacing LL furniture, sub-letting rooms, redecorating them, keeping a pet in the house. Maybe, the house could be vandalized. All this would involve substantial cost to put right. In addition, there is cost of repossession, etc. AST terms are standard based on Oyez stationary.

                              2. On the S8 route to repossession, my case rests on grounds 8, 10, 11, and 12, although I could only state 8, 10, 11 to deter any counter-claim. However, confirmation can be obtained from neighbours about 12. Even on the mandatory ground 8 I have a strong case, as I don’t think T is likely to pay. Do I need to add 12 in case the tenant tries to be clever, putting in a counter-claim for repairs and all that? I am also thinking about the return of my deposit in full.

                              Even though s21 is a safer option, I think now that making a case through s8 might be strong. However, I am more thinking about what to state on s8 notice.

                              Comment

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