Alternatives to deposit protection

[guineapig]

I took two months rent in advance instead of a deposit. My tenant moved in on 3rd March, made a late payment in April and has not yet made the payment due on 3rd May. As I understand I could serve a section 8 when rent is one month and one day overdue, am I correct or does taking two months in advance change the date I could serve a Section 8 notice.

[multipropertyguy]

So is it still possible to give each tenant 1-4 a separate six month Non-Housing Act Tenancy (reason for this they are sharing and don't know eachother) contract to sign. For each tenant after this (5,6,7) a six month Non-Housing Act Tenancy contract plus a 'Supplemental Agreement'?

How would you suggest the deposit is taken and held?

Thanks in advance,

[pcwilkins]

I’m sure you’re probably answering different questions which I am conflating in my head.

Good word --- conflating. I must use that more often. I actually had to look it up.

Peter

[jeffrey]

Now you've got the idea- excellent!

[Ash_1]

1. NO! You have misunderstood.
2. You cannot sell/let/transfer title to > 4 people. This is true for EVERY case under no matter what legislation (except re charities etc.)- even a long leasehold or a freehold sale.
3. A residential letting @ rent > £25 000 is outside the Housing Act 1988, cannot be either an AST or an SAT, and is not within any of the deposit requirements. Only common-law and contractual rules apply. The limit of 4 people also applies of course.

I’m sorry I know I’m being dim. What’s confused me is in response to my questions you said:

“Not true. You can let on AST or SAT.”

I took this to mean ASTs could apply to my situation. Obviously that’s not what you meant because you say

“A residential letting @ rent > £25 000 is outside the Housing Act 1988, cannot be either an AST or an SAT,”

I’m sure you’re probably answering different questions which I am conflating in my head.

Anyway that’s by the by. To summarise my position, as I understand it from what you have said, I have to use a Non-Housing Act Tenancy because an AST or SAT is not applicable due to income being >25K. Good. But since I have 5+ tenants I have to write it as per one of your previous answers:

“For person 5+, I'd recommend a Supplemental Agreement between L and each supernumerary person occupying (O)”.

I plan to write the draft and then I’ll contact you via e-mail to ask how much you’d charge to look over it for me.

Thanks a lot.

[jeffrey]

I thought that since the rental income was above 25K it was NOT possible for me to use an AST - I see from what you say that I can. Since it avoids TDS I still think I’d like to go down the Non-Housing Act Tenancy route anyway. So I will just modify the AST I have to take out any reference to AST and Section 21? Should I include something about the fact that I still reserve the right to re-possession given say one month’s notice? Even though my understanding is that with a Non-Housing Act Tenancy you don’t even have to give notice.

1. NO! You have misunderstood.
2. You cannot sell/let/transfer title to > 4 people. This is true for EVERY case under no matter what legislation (except re charities etc.)- even a long leasehold or a freehold sale.
3. A residential letting @ rent > £25 000 is outside the Housing Act 1988, cannot be either an AST or an SAT, and is not within any of the deposit requirements. Only common-law and contractual rules apply. The limit of 4 people also applies of course.

[Ash_1]

Not true! It is valid, but it binds only people 1-4 (not 5-7).

Not true. You can let on AST or SAT. In latter case, Agreement needs modifying. It will bind only people 1-4 nonetheless.

Yes, whether AST or not.

Wow – obviously I only have a partial understanding!

I thought that since the rental income was above 25K it was NOT possible for me to use an AST - I see from what you say that I can. Since it avoids TDS I still think I’d like to go down the Non-Housing Act Tenancy route anyway. So I will just modify the AST I have to take out any reference to AST and Section 21? Should I include something about the fact that I still reserve the right to re-possession given say one month’s notice? Even though my understanding is that with a Non-Housing Act Tenancy you don’t even have to give notice.

[pcwilkins]

This would really screw up the TDS business model.

Why would you want to do that, though?

Peter

[pcwilkins]

Could you just take zero deposit but take 2 months rent in advance instead?

Of course --- you can take 6 month's rent in advance if you want. But that still means you don't have anything to cover damage or unpaid rent, so you might still want to take out insurance.

Peter

[frednick]

Could you just take zero deposit but take 2 months rent in advance instead?

[over graced]

Don't 'not take a deposit'.

I would suggest it is better to take a deposit of 2p.

At the end of the tenancy, withhold 1p for damages and encourage the tenant to dispute the reduction. Take it to arbitration if necessary.

This would really screw up the TDS business model.



OG

[jeffrey]

I rent out a large 7 bed house and the rental income is above 25K. It isn’t a student let - all my tenants are young professionals working in the city. I wrote them a one year AST last Sep but from what you have written I can see it is not valid.

Not true! It is valid, but it binds only people 1-4 (not 5-7).

1) Since I don’t need an AST I believe I can write any contract I like that obviously takes into account tenants rights. What should this contract look like? Is there a template somewhere? Or can I just base it on the standard AST but just cut out any reference to the phrase “AST” – I know I don’t have to offer my tenants all the rights a standard AST offers but I think it’s a pretty fair contract and I am happy to extend them these rights.I presume at the top of the contract I write “Non-Housing Act Tenancy”?

Not true. You can let on AST or SAT. In latter case, Agreement needs modifying. It will bind only people 1-4 nonetheless.

Since there are 5+ people do I have to write the contract as per one of your previous answers that begins “For person 5+, I'd recommend a Supplemental Agreement between L and each supernumerary person occupying (O)”.

Yes, whether AST or not.

[Ash_1]

[QUOTE=jeffrey;59736]Several recent threads highlight the problems which L faces in trying to obtain, at end of tenancy, deposit funds held by DPS etc. QUOTE]

Hi Jeffrey you are obviously the master of the non AST contract! So if I can I’ll tell you my situation and then if you don’t mind I have some questions. I rent out a large 7 bed house and the rental income is above 25K. It isn’t a student let - all my tenants are young professionals working in the city. I wrote them a one year AST last Sep but from what you have written I can see it is not valid. So here are my questions:

1) Since I don’t need an AST I believe I can write any contract I like that obviously takes into account tenants rights. What should this contract look like? Is there a template somewhere? Or can I just base it on the standard AST but just cut out any reference to the phrase “AST” – I know I don’t have to offer my tenants all the rights a standard AST offers but I think it’s a pretty fair contract and I am happy to extend them these rights.I presume at the top of the contract I write “Non-Housing Act Tenancy”?

2) I presume, unlike an SAT, I don’t have to inform the tenants that this is not an AST.

3) Since there are 5+ people do I have to write the contract as per one of your previous answers that begins “For person 5+, I'd recommend a Supplemental Agreement between L and each supernumerary person occupying (O)”. Or is this for ASTs only? If it not just for ASTs and applies to me where can I find a template that includes the correct wording?

4) Also since this is not a SAT, I don’t have to serve them a pre-tenancy Ground 1 Notice right? I just have to give them reasonable notice to quit?

5) Since it’s not an AST I can’t use Section 21 but can still use Section 8 right? Are there any other avenues open to me since Section 21 is not?

6) I would like to issue this new contract in Sep when the contract is up for renewal otherwise I may have to spend lost of time explaining why I am "changing things" mid-contract. Is this ok since all rights still hold i.e. since I do not have an AST with my tenants despite what we all signed, it’s assumed in law that we have a Non-Housing Act Tenancy with all the usual rights that confers?

Phew – that was longer than I planned! Thanks in advance.

[jeffrey]

'Scuse my ignorance, but would option A also cover LL in case of T causing damage to property, or would it just cover unpaid rent?

Peter

Depends on terms of insurance, I imagine.

[pcwilkins]

'Scuse my ignorance, but would option A also cover LL in case of T causing damage to property, or would it just cover unpaid rent?

Peter