Rosie Millard comments

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    Rosie Millard comments

    Found an interesting comment in the Liverpool "Your Move" magazine (no relation to the your move lettings/sales agency) by Rosie Millard, Sunday Times "property guru".


    Meanwhile , there's another issue coming around the corner this spring, namely the Mandatory Deposit Protection Scheme[1]. No longer cann you stave off the effects of a feww weeks' void by plugging the gap in the mortgage repayments with the deposit of the next tenant (we all do it from time to time). Now lanldords must hand over the tenants' deposit at the start of the tenancy to a National Custody Scheme.... (continues on about agents and insurance backed schemes...)

    [1] Her capitalisation, not mine.

    I have never, ever kept deposit money in the same account as the rental income/mortgage payment funds. Most landlords I know do not. Very suprising to hear someone mention this, to be honest.
    Liability statement. My liability to you is not to exceed the amount you are paying for my recommendations or advice.

    I see a bright new future, where chickens can cross the road with no fear of having their motives questioned

    #2
    Terrible. Next thing you'll be telling me, some landlords buy premium bonds with the deposit!!

    Comment


      #3
      Originally posted by RichieP View Post
      Terrible. Next thing you'll be telling me, some landlords buy premium bonds with the deposit!!
      With the Bond, surely?
      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


        #4
        This should be an interesting thread Wickerman!

        I can't be the only LL who has had to use the tenant's deposit in place of late rent payment in order to cover mortgage payments during a bad month! My tenancy agreement (and I'm sure I'm not alone) does state that it is up to the landlord to decide how to use the deposit in the scenario of breached contract.

        Am I wrong in this? Isn't that a part of why the deposit is paid? So when tenants default on their rent and their deposit is safely tucked away in a TDS how do you fund a mortgage payment if the tenant defaults on rent payment?

        Just another example of the world gone mad and of tenants getting the 'upper-hand on decent law-abiding landlords (in my opinion anyway)!

        Am I really alone in these thoughts?

        J

        Comment


          #5
          Ask MARAS for a quotation. It provides tenancy guarantees and even credit/status check.
          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
            I've not head of this scheme Rosie Millard mentions, anyone know anything about it?

            Pete

            Comment


              #7
              Hi Wickerman

              I know property letting is supposed to be a business but trying telling that to the Local Authority and the courts and see where that gets you!

              In last twelve months I've had two defaulting tenants who have amounted £5k worth of debt to me! Then there's the thieving tenant who now nearly owes me nearly £900 in rent! That amounts to the yearly payment on just one of my mortgages!!! & then there's all the fees associated with taking the tenants to court!

              My little business is only two years old and probably won't reach it's third birthday if things continue in this manner! After bad experience with first defaulting tenant (friend of a friend which was big mistake costing me £3k) I let to a couple (strangers) who I did all the credit checks etc. However, passing credit check still didn't stop them abondoning the property and leaving me with an additional £2k loss of rent!!!

              Both these defaults took place in a set of three self-contained flats (house conversion) which when all three are occupied and rent being paid provides me with a 12% yield. But when only one tenant paying rent leaves a shortfall for the mortgage payment!

              The property with thieving tenant was bought with two loans (costing £888 to repay each month) so we already sudsidise that payment by £488 monthly without the added hassle of the £400pcm rent not being paid. Bad money management I hear you all say! But if all tenants at flats pay up that actually covers all the mortgage overheads! The emphasis being on the word IF!

              I think we've actually done pretty well to have been able to stand the £5k lost rent to date! But are entitled to your opinion Wickerman and I respect that.

              J

              Comment


                #8
                Ah consolidation! I'm currently getting a mortgage on the property "thieving tenant" occupies with the intention of settling the loans and reducing my outgoings on that property by half. Therefore rent payments (now there's a joke) will actually cover the whole mortgage.

                I did hope not to have to mortgage the property because if we'd just paid the loans (which are not secured on the property) we wouldn't have any major overheads on the property at all.

                The original intention was to use the mortgage money for our next property purchase (& renovation) but with rent payments (rather lack of them) the way they are I doubt we can risk having to cover the loans as well as the mortgage! Police wage doesn't pay that much!!!! It would appear the "thieving tenant" actually earns more than me and my ex partner (still business partner)!

                J

                Comment


                  #9
                  Basically the deposit should be held in a separate account and not touched by the landlord. Then when the tenant leaves the deposit can be paid in full plus any interest owing. Or if there are any problems such as rental arrears or the property has been left in a mess, etc, this is the time the deposit should come into play.

                  Now this is the theory but it never really works as all to often this money is spent before the tenant moves in, but this is one of the reasons the government is bringing out the Tenancy Deposit Scheme. As many of you are aware from 6th April '07 (unless government moves goalposts again), every landlord who holds a deposit will have to be a member of a Tenancy Deposit Scheme and forward the deposit to be retained by the scheme and any disputes will have to go through the appropriate arbitration at the end of the tenancy. So you will not be able to get at it and use it to cover any rental arrears.

                  Don't blame me for this it is one of the governments fabulous ideas. There is a lot more info available on this web site about it plus go onto www.communities.gov.uk .

                  Comment

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