Advanced rent has now become a deposit

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    #16
    Originally posted by westminster View Post
    I think you need to face the fact that you did sign an agreement clearly stating that the additional £1,800 was a deposit to be held as security against arrears.

    It seems to me rather opportunistic to insist otherwise, then effectively say you might change your mind if you find you have a 'strong enough' case to claim for non-compliance with deposit protection.
    I guess I'm just a bit bruised from all this and feel unfairly treated yes we did sign it, wish we had come on this site when it all happened and could have avoided all this. Thanks for your comments

    R & L

    Comment


      #17
      Bassett Hound Madness

      I think you case is stronger than you might think and you could receive a good windfall here.

      Firstly, you dropped in the fact that you paid 6 months rent up front. If this was denoted as a monthly paid rent the most common reason for this is not able to get references, perhaps because you moved from abroad, are self employed etc.

      What people don't seem to grasp is the the Housing Act 2004 contains its own definition of a deposit which says:
      “tenancy deposit”, in relation to a shorthold tenancy, means any money
      intended to be held (by the landlord or otherwise) as security for—
      (a) the performance of any obligations of the tenant, or
      (b) the discharge of any liability of his,
      arising under or in connection with the tenancy.

      If the agent could not get adequate references (or similar) and therefore took 6 months rent up front on a monthly payable tenancy, there is a strong argument that 5 months worth is a deposit, ie it was not due yet but was taken early TO MAKE SURE you paid. On this logic, and using the rental amount of £900pcm you could seek return of the £4,500 paid up front and a penalty of three times this amount (£13,500). This all assumes that they correctly protected the first "real" deposit of £1,100, otherwise you can claim the same here.

      There are two or three court cases where rent in advance has been confirmed as a deposit within the definition of the act. For example Da Costa v Pinter, Bromley County Court, Apr 09 or Piggot v Slaven, Great Grimsby County Court, Feb 2009.

      Additionally, when it went periodic, you paid another £1,800, which by the above definition was a deposit. This has the same effect that you claim it back and seek the penalty of 3 times the deposit (you are still better off even if you have to pay the last two months rent). A total payment to you of £5,400 net of paying the rent.

      Depending on if the addendum you signed had the effect of creating a new tenancy, you may be entitled to the same £3,300 penalty for getting it wrong on the second tenancy. This will depend on the specific wording and you will need bespoke advice. The case of Saad v Hogan, Brentford County Court Feb 09 (and other cases) confirmed the notion that a proper renewal should be covered.

      Which scheme is used them becomes critical. If it was The DPS, the late protection, up to the point of court application, is clearly allowed following the case of Draycott v Hannels. If it was TDS (as stated) then since their rules clearly state that protecting it within 14 days and giving the prescribed information within 14 days are an "initial requirement" of the scheme, you would have a very good claim regardless of the late protection on the basis of
      section 214 of the Housing Act (in respect of the initial requirements of the scheme) and so if proven a penalty is payable and no section 21 notice can be valid.

      Just to help a little more, I recently saw this link offering, effectively "no win, no fee" help from a solicitor specialising in this area of work. Got to be worth a discussion.

      http://www.landlordlawblog.co.uk/201...heir-deposits/

      Best of luck

      Comment


        #18
        I agree that it could be a possible argument. Does the TA state rent is payable monthly or 6 months in advance? In any event the £1800 paid at the end of the fixed term seems to be a further deposit liable to be protected.
        PAUL GIBBS, solicitor, Jacobs & Reeves. My comments on this forum are correct to the best of my knowledge and belief. No responsibility or liability is accepted by reason of reliance upon such comments. This disclaimer would not apply to direct clients of Jacobs & Reeves where there is a valid retainer in place and I would be happy to confirm any advice if formally instructed. . Jacobs & Reeves now offer a fixed fee possession service.

        Comment


          #19
          [I][COLOR="Navy"]The TA states

          Term For the term of six months commencing on 27th March 2009

          Rent £5400 for the fixed term, payable in full in advance. Should the tenancy continue as a periodic tenancy after the expiry of the fixed term, the rent will be £900.00 per month, payable in advance on the 27th of each month.

          Deposit A deposit of £1000 is payable on signing this agreement. It is protected by the following scheme

          [B]The Dispute Service

          Hope this helps

          R & L

          Comment


            #20
            So the fixed-term's rent is clearly not monthly. The Agreement cannot invent new terms applicable only during an SPT thereafter.
            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


              #21
              Originally posted by jeffrey View Post
              So the fixed-term's rent is clearly not monthly. The Agreement cannot invent new terms applicable only during an SPT thereafter.
              Sorry not quite sure what that means

              Comment


                #22
                What do we do?

                Dear All

                Kept waking up last night worrying about the situation so have decided to seek legal advice, CAB were good and felt we had a case. But pointed us in the direction of the tenancy dispute service. They cannot deal with us until we move out so feel at a loss as to what to do. Perhaps should do everything that I'm being told to by agent, ie pay last months rent and let the TDS sort it out. Or stand my ground and not pay the last months rent but run the risk of this counting against me when the TDS sort it out. AHHHHHHHHHHH!!

                I'm probably over reacting and should just relax now and get on with the move but I'm a bit of a worrier and can't leave this alone.

                Help me please, even if you tell me to stop being stupid and calm down dear!!

                L & R

                Comment


                  #23
                  The only deposits paid were the £1,000 at commencement and the further £1,800 at the end of the fixed term. These did require protection, and you may therefore have a claim for these.

                  At the end of the fixed term a periodic tenancy arises. This is not on a month by month basis, but rather a further term of 6 months. This is because the original tenancy agreement stated rent was payable 6 months in advance.

                  The result is that on the date the fixed term expired, a periodic tenancy was created, and you were liable to pay LL a further 6 months rent upfront.
                  PAUL GIBBS, solicitor, Jacobs & Reeves. My comments on this forum are correct to the best of my knowledge and belief. No responsibility or liability is accepted by reason of reliance upon such comments. This disclaimer would not apply to direct clients of Jacobs & Reeves where there is a valid retainer in place and I would be happy to confirm any advice if formally instructed. . Jacobs & Reeves now offer a fixed fee possession service.

                  Comment


                    #24
                    Originally posted by Paul Gibbs View Post
                    The only deposits paid were the £1,000 at commencement and the further £1,800 at the end of the fixed term. These did require protection, and you may therefore have a claim for these.

                    At the end of the fixed term a periodic tenancy arises. This is not on a month by month basis, but rather a further term of 6 months. This is because the original tenancy agreement stated rent was payable 6 months in advance.

                    The result is that on the date the fixed term expired, a periodic tenancy was created, and you were liable to pay LL a further 6 months rent upfront.
                    We asked them at this point to go to a monthly in advance payment arrangement. They declined but the LA offered the current arrangement which we signed an appendum for so at this point they should have put the security into a deposit scheme? I'm with you, so to stay within the rules I should pay the last month's rent and then wait for our money back from the Tenancy Deposit Scheme??

                    Comment


                      #25
                      Originally posted by jeffrey View Post
                      So the fixed-term's rent is clearly not monthly. The Agreement cannot invent new terms applicable only during an SPT thereafter.
                      Originally posted by BassetHoundMadness View Post
                      Sorry not quite sure what that means
                      The letting was for one lump-sum of rent. This was not payable monthly.

                      Whatever provisions are in the Letting Agreement (fixed-term) continue unchanged** once the fixed term ends and the letting turns into a Statutory Periodic Tenancy (SPT). The Letting Agreement cannot impose new provisions applying only during the SPT, because it's the 1988 Act (not the Letting Agreement) that creates the SPT.

                      An SPT's period is just the same as the fixed-term's rent frequency which, here, is six months. So it's a half-yearly SPT. Geddit?

                      ** except re Notice/termination provisions
                      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


                        #26
                        It would appear they probably dealt with the original tenancy and deposit correctly.

                        However, as Paul said, they seem to have collected addition rent/deposit when it went periodic and they have failed to deal with this correctly (leaving you open to reclaim that money and a penalty of three time that amount (£7,200 less the two months rent they owe you).

                        You may need to look carefully at whatever addendum you signed. It could have created a whole new agreement or just be some supplementary change in terms or conditions.

                        Regarding TDS do not worry at all. Firstly they are not any form of court and cannot penalise you, whether you pay or not. The worst they can do is require you to pay the two months rent owed from the deposit money, that at that point, they will hold. No big deal.

                        I say you start, without delay, your claim for the additional £5,400 they could be liable for for not protecting your additional deposit properly.

                        With agents like this no wonder we have this dreadful legislation!

                        Comment


                          #27
                          LA sent latest prescribed information

                          Hi All

                          Our LA has sent a copy of the latest Prescribed Information for The tenancy deposit scheme. I have returned them unsigned and referred the LA to our last letter.

                          The TDS came back to us as we copied them on the last letter. They have asked for our complaint ref number. I don't have one. I thought you couldn't open a dispute/complaint until you've moved out. Are these two seperate things. I've written back asking can I open a complaint.

                          Apart from the prescribed info which I believe crossed in the post we have heard nothing from LA with regards to seeking compensation through the small claims court.

                          I'm very worried about the check out inspection. The inventory they gave us to sign when we moved in was not detailed at all and missed off very obvious damage, wear & tear, marks etc. I went through it myself room by room and updated it. It took me the whole day, we took it to the office and they photocopied it and gave us a copy and kept one on file. Luckily they had a covering letter with it confirming my updates.

                          I was always suspicious why they had left off so many obvious flaws to the property. How would the TDS look at it seeing so many additions to the inventory list by me? My worry is that I may have missed some damage (was very excited and tired when we moved in). How do I stand if I missed anything?


                          R & L

                          Comment


                            #28
                            The last letter we sent to LA

                            We are completely confused by your letters. We paid a deposit at the commencement of our tenancy which was registered with TDS under reference number OBX######## A further £1,800 was paid at the end of the fixed term 27th September 2009, this required protection as per TDS legislation but you failed to do so.

                            We feel as our agent you have not handled this correctly and kept us informed appropriately.

                            The TDS certificate MX###### included in your letter dated 15/08/2010 states the date as 27th September 2009 . As you have only just registered the £1800 paid on 27th September 2009 surely the certificate should have 6th August 2010 date? Why are there not 2 separate certificates when our monies were registered 6 months apart? Or is this advanced rent as previously presumed by all parties? In which case rent in advance that is intended to be a 'permanent' buffer or security ALWAYS counts as a deposit once you get over 1 month. This has been held in a number of deposit cases now in court.

                            I believe as our letting agent you had an original duty to provide this information within 14 days of the deposit being paid, and as a result the correct date of protection is an important matter of record for ourselves.

                            We will endeavour to issue a claim against you in the small claims court for compensation, for not protecting our additional deposit properly and within the 14 days set out by the TDS.

                            In addition to the above we expect both of our deposits to be returned promptly and in full once fair deductions if applicable have been made.





                            We await your reply

                            Comment


                              #29
                              LA has now changed from TDS to The Deposit Protection Scheme?

                              We have had a reply from LA today, why would he change where the deposit is registered? Any help would be appreciated..

                              Further to your letter of 22nd August 2010 I must apologise for my late reply. Having just returned

                              from my annual leave I hope you will appreciate that I have had a great deal to catch up on.

                              Having taken time to review the file there has clearly been a considerable amount of correspondence

                              between you and ********* with respect to the advance rent paid over on the tenancy change. I see

                              little value in repeating this detail. Although I consider it prudent to change the deposit scheme that

                              has been used.

                              Therefore these monies representing £1800 are now held and registered with "The Deposit Protection

                              Scheme" whilst your tenancy deposit of £1000 remains registered with "The Dispute Service" under

                              its latest certificate as enclosed.

                              Therefore all monies are protected and accounted for given the landlords instructions and your

                              changing demands.

                              Your letter refers to us as "our Agent" and "our letting agent". It may come as a disappointment and

                              indeed on reading your letter to ******* you felt "hurt" by this statement. Clearly if *******'s

                              terminology or inference was wrong then please accept my sincere apologies but I must respectfully

                              remind you that we are not your Agent. We are Agent for the landlord and it is the landlord who is

                              our client.

                              Please trust that the handling of your check out and refunding of your deposit will be in accordance

                              with the joint schemes associated with your tenancy. The Check Out procedure documentation has

                              been published to you and should you follow our guidance notes, the property is returned in an

                              acceptable condition and rent is paid there should be no reason that the deposit refund is at risk.

                              On this subject our check out documents included a "Check Out" form that requires your completion

                              and return before you vacate. I note that to date we have not had this and politely remind you that

                              this is required.

                              Please would you also sign and return the attached Deposit Information Certificate required by the

                              DPS.

                              Therefore in summary, I hope you can now focus on a successful check out and move into your new

                              home.

                              Your sincerely

                              Comment


                                #30
                                Originally posted by BassetHoundMadness View Post
                                We have had a reply from LA today, why would he change where the deposit is registered?
                                Because the DPS allows late protection of deposits, and because of a binding high court ruling earlier this year, which ruled that the 3x deposit sanction does not apply to late protection with the DPS.

                                This means you would fail in a claim for non-compliance with deposit protection (unless the high court ruling is overturned later this year - there are decisions pending).

                                Comment

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