Depsit scheme exemption

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  • Depsit scheme exemption

    The article you show on FT.com regarding the new deposit scheme states
    "any tenancy that costs more than £480 a week is exempt from the new rules".
    We rent a house to students who sign one contract for 10 months of the year and the rent is over £480.00 a month. Would this make us exempt from the scheme?

  • #2
    do you £480 per month or week - you have stated both?

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    • #3
      Must be per week as over this amount, it will take the tenancy to > 25k per annum and therefore cannot be an AST.

      Cheers
      Now signature free.

      Comment


      • #4
        Originally posted by lorenzo View Post
        Must be per week as over this amount, it will take the tenancy to > 25k per annum and therefore cannot be an AST.

        Cheers
        480 x 52 = 24960, just under upper limit for 1988 Act to apply.
        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).

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        • #5
          Hi guys,

          Sorry for the delay have been on hols.
          As I stated previously we have a property which we rent for more than £480 per week. Does this mean we should not be drawing up an AST and also are we exempt from the TDS?

          Esther

          Comment


          • #6
            Originally posted by Esther View Post
            Hi guys,

            Sorry for the delay have been on hols.
            As I stated previously we have a property which we rent for more than £480 per week. Does this mean we should not be drawing up an AST and also are we exempt from the TDS?

            Esther
            Yes and yes.

            Start with paragraph 2 of Schedule 1 to Housing Act 1988.
            A letting after 1 April 1990 at a rent > £25 000 pa is:
            a. not capable of being an "assured tenancy; so
            b. is not within the 1988 Act; so
            c. is not subject to the TDS nonsense either.

            It is best described as a common-law contractual tenancy. The layout of an AST could still be used BUT deleting inappropriate bits and clearly stating that it is not governed by the Housing Act 1988.
            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).

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            • #7
              Originally posted by jeffrey View Post
              480 x 52 = 24960, just under upper limit for 1988 Act to apply.
              480 / 7 * 365 = 25,028 just over upper limit methinks.
              On some things I am very knowledgeable, on other things I am stupid. Trouble is, sometimes I discover that the former is the latter or vice versa, and I don't know this until later - maybe even much later. Because of the number of posts I have done, I am now a Senior Member. However, read anything I write with the above in mind.

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              • #8
                Originally posted by Esio Trot View Post
                480 / 7 * 365 = 25,028 just over upper limit methinks.
                Nope. It's not a daily rent, is it? It falls due 52 times a year.
                If it fell due 53 times, depending on how many rent days in the year, you could be right.
                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


                • #9
                  May i ask why you are basing it on a full year when the original post stated that the students are only taking it on a 10month contract?

                  Comment


                  • #10
                    Originally posted by 99sc1610 View Post
                    May i ask why you are basing it on a full year when the original post stated that the students are only taking it on a 10month contract?
                    Because the Act does not say "rent for a year".
                    It says" ...under which the rent payable for the time being is payable at a RATE* exceeding £25 000 a year."

                    *- my capitals for emphasis.
                    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
                      Jeffrey,

                      You wrote:

                      It is best described as a common-law contractual tenancy. The layout of an AST could still be used BUT deleting inappropriate bits and clearly stating that it is not governed by the Housing Act 1988.

                      Which bits do I delete? Presumably I need proper legal advice.

                      Esther

                      Comment


                      • #12
                        Presumably so. You will otherwise have to decide which bits are AST-specific.
                        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

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