Passing costs of TDS to tenant

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  • Passing costs of TDS to tenant

    Have been looking high and low and nowhere can I find the legislation that states that the costs of the TDS cannot be passed onto the tenant directly.

    By that I mean literally asking the tenant to cough up the costs before the start of the tenancy, not just including it in raised rent.

    Can anyone enlighten me?

    Also can't find actual legislation where it states that landlord must pay up to 3 times rent in compensation if not in a scheme. Housing Act 2004 merely states that S21 cannot be served until scheme joined.

    Any help there too? I'd like the specific Act/Statutory instrument. Thx.

  • #2
    Originally posted by attilathelandlord View Post
    Have been looking high and low and nowhere can I find the legislation that states that the costs of the TDS cannot be passed onto the tenant directly.

    By that I mean literally asking the tenant to cough up the costs before the start of the tenancy, not just including it in raised rent.

    Can anyone enlighten me?

    Also can't find actual legislation where it states that landlord must pay up to 3 times rent in compensation if not in a scheme. Housing Act 2004 merely states that S21 cannot be served until scheme joined.

    Any help there too? I'd like the specific Act/Statutory instrument. Thx.
    I think that all of your points will be covered by Statutory Instuments, not in the 2004 Act itself. Details to follow once I locate them.
    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


    • #3
      You may be right, I believe there are some that are due to be published that will cover this.

      I've had several interesting chats with several policy bods of various organisations and get a 50% split yes/no.

      I will keep looking also.

      Comment


      • #4
        Little odd. Been trying to locate the legislation using search engines. Can't find it at present. Used to be able to. Could it be my imagination?

        Comment


        • #5
          Even the official UK Statute Law Database is silent on this!
          I have sent an enquiry e-mail and will report back asap.
          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
            I think that all of your points will be covered by Statutory Instuments, not in the 2004 Act itself. Details to follow once I locate them.
            You won't find them Jeffrey, they haven't been released yet and knowing this government it maybe May before anybody sees them

            Rumour has it they will be released the week before the deadline, but how accurate that is, I dont know.

            The disclaimer on the ARLA website says :-

            Disclaimer
            The answers in this note are provided in good faith and are based upon the information currently available (February 2006) but are subject to change as Statutory Instruments still have to be laid before parliament and contracts negotiated by successful scheme administrator bidders. Return to the top of the page

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            • #7
              Think I've found it http://www.opsi.gov.uk/acts/acts2004/40034--q.htm#214
              paragraph (4) specifies compensation equalling three times deposit to be repaid to applicant (ie tenant).

              Comment


              • #8
                Found it in the end by starting out from the www.opsi.gov.uk website and then drilling down through
                • Legislation
                • UK
                • Acts
                • Public acts 2004
                • Housing Act 2004 web version (HTML)
                • did a search on the text for "deposit"
                • Sanctions for non-compliance
                • and found the correct section above

                Not easy.

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                • #9
                  Ha must have missed that am getting old!

                  Comment


                  • #10
                    But the rules about costs will be in the (awaited) SI, it seems.
                    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 attilathelandlord View Post
                      Have been looking high and low and nowhere can I find the legislation that states that the costs of the TDS cannot be passed onto the tenant directly.

                      By that I mean literally asking the tenant to cough up the costs before the start of the tenancy, not just including it in raised rent.

                      Can anyone enlighten me?
                      I don't see anything that says a landlord must bear the cost. I can only assume that the legislators expect that to be a matter for negotiation between the contracting parties.

                      In the same way that tenancy agreements state that rates, utilities and council tax are payable by the tenant - Make it a clause in the tenancy agreement. "Cost of holding tenant deposit to be borne wholly by tenant and is payable on the commencement of this tenancy." Or whatever similar. This of course needs to be backed up with an attached invoice from the scheme the landlord has chosen.

                      Or, simply charge a higher total rent and you deduct the cost from your tax bill, probably end up with the same net profit.

                      Or, simply charge the same total rent and you deduct the cost from your tax bill, thereby taking a smaller overall profit.

                      Alternatively, simply don't take deposits on or after 6 April 2007.

                      For clarity it is probably in the landlord's interest to specify who keeps any interest earned on the deposit in the tenancy agreement.

                      Comment


                      • #12
                        Yes i agree with what you say.

                        I just like to see the root law in black and white as I've been asked this very question many times and couldn't locate the legislation.

                        Thx.

                        Comment


                        • #13
                          Just phoned Shelter under the guise of being a tenant in order to get clarification.

                          Basically they are saying the same thing, it is not allowable for a landlord to recharge the TDS costs outright and I quote "if your landlord knows what they are doing they should increase the rent".

                          Also "if you get charged, come straight to us and we'll help you fight it".

                          However, I still didn't get the specific legislation. Suspect it will be in a Statutory Instrument yet to be released.

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                          • #14
                            Are you living so close to the edge financially that you would resort to spreading £30 over 12 annual payments just to get out of your obligations to pay this?

                            Comment


                            • #15
                              LL: The rent is 702.50 pounds per month.

                              T: That's a strange figure. Why is that?

                              LL: I have to to cover TDS costs.

                              T: HANG ON! If I stay longer than a year, you're ripping me off 2.50 per month; I want a discount after 12 months! I want you to take off the 2.50 after you've paid off the TDS.

                              LL: You're being a bit petty aren't you?

                              Babboom
                              Now signature free.

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