What type of tenancy forms do you have?

Since the 1996 Housing Act, which came into force on 1 February 1997, all forms, unless they say otherwise, are now Assured Shorthold Tenancies (also known by their initials as an AST). Please click on the free assistance tab at the bottom of this website for further information.

I want to inspect the condition of my let property, how can I do this?

Check the terms of the tenancy agreement. Most written tenancy agreements allow the landlord to inspect the property after reasonable notice has been given to the tenant. Reasonable notice is usually no less than 24 hours and generally requires the landlord to give this in writing. What would not be acceptable is the landlord simply turning up and letting himself into the property as this could be a breach of the tenant’s rights of quiet enjoyment.

My tenant has changed the locks, is this allowed?

If the tenant changes the locks, landlords are not entitled to a key unless it says so in the contract. However, the tenant should not unreasonably withhold access, and if he or she does, the landlord can apply to the county court for an injunction. If the tenant does change the locks they should preserve the fixtures and fittings. Any damages caused by the tenant maybe recoverable from the tenancy deposit.

Is the annual rent payable for an assured shorthold tenancy in England subject to any financial limit?

From 1st October 2010, any new AST which is created in England after this date with a rent payable up to a maximum of £100,000 per year must have the deposit protected in accordance with the Tenancy Deposit Scheme.

I have let to three joint tenants and they will expect to receive a third of the deposit each at the end of the tenancy.

If you have let to them on a “joint and several” basis, as is usual, they cannot insist on this unless you agreed to do so in advance. If you use the custodial scheme, they will have to nominate a ‘lead tenant’ to act for them, and to whom the scheme will make one payment in respect of the deposit. It is then up to the tenants to divide up the payment as they wish.

Can I make the tenant pay two months’ rent in advance instead of taking a deposit?

It is not permissible to require rent to be paid before its due date, so this might well be regarded as a sham by the Courts, leaving you liable to the penalties for non-compliance with the regulations. In any event you would have to forgo the last month’s rent and effectively do without a deposit. I have let to three joint tenants, one of them wants to leave and has found a suitable replacement, but he wants a third of the deposit back. Technically this amounts to a surrender of the existing tenancy and the creation of a new tenancy. It may be possible for the tenants to reach agreement amongst themselves for the new tenant to reimburse the departing tenant and take over his right to some of the deposit, but if there is any doubt this should be treated as if the whole deposit is to be returned and new one paid.

Can I charge the tenant a higher rent, take no deposit, but offer to refund some of the rent at the end of the tenancy if he leaves the property in good order?

As in practice this has the same effect on the tenant as taking a deposit, the Courts might well view it as a sham, with no purpose other than to avoid the regulations. Consequently you risk the penalties for non-compliance. In addition, bear in mind that an AST tenant can, within the first six months of his tenancy, refer the rent to the Rent Assessment Committee, who may order it to be reduced if it is higher than the rents paid for similar properties in the area that are also let on ASTs. This could put you in the position of having to reduce the rent and still being obliged to refund part of it if the property is left in good condition!

What if my letting agent holds the deposit but goes out of business before the end of the tenancy – I have heard that I would be liable to repay it to the tenant?

In principle that is and always has been correct – you are responsible if your agent defaults. An advantage of the new regulations is that if your agent holds the deposit, they must belong to one of the insurance schemes, which will pay out if they don’t

What if the tenant disappears without leaving any forwarding address?

At least 14 days after the end of the tenancy, the landlord can notify the scheme administrator of any claim that he wants to make on the deposit. He must supply a statutory declaration that the tenant cannot be contacted, as well as the usual details of his claim and evidence to support it, and whether he prefers the use of the ADR service or the Courts to resolve any dispute, if the tenant does come forward the scheme administrator then sends the declaration and details of the claim to the tenant, at the tenant’s last known address. If there is no response after 14 days, the landlord’s claim can be accepted in full by the scheme and the deposit may be retained or disbursed by the landlord or custodial scheme accordingly.

Tenancy Deposit Scheme: What about deposits held by landlords in respect of ASTs already in existence?

Current fixed term ASTs that span 6 April 2007, or ASTs that are continuing on a periodic basis, are not affected. However, the landlord of an existing AST that is renewed or extended at some point after that date by means of a new tenancy agreement should comply with the regulations in existence at that time.

Penalties for not protecting the deposit

The tenant can apply for a Court order requiring the landlord to comply with the regulations and provide the prescribed information to the tenant. The Court can order the landlord to: (a) repay the deposit, or (b) pay the deposit into a scheme; and (c) pay the tenant a sum equal to three times the deposit all within fourteen days of the Court order. In addition, while the landlord/agent is in breach of the regulations, any Section 21 notice issued will be invalid. This will in most cases preventing the landlord from recovering possession of the property if the tenant does not leave at the end of the tenancy.

Resolving tenancy deposit disputes

An important feature of the legislation is that both types of scheme must also provide free and impartial “alternative dispute resolution” (ADR) services, to settle disputes about deductions from deposits. These are designed to provide a quicker and simpler service than is available through the Courts.

What types of tenancy deposit schemes are available?

There are at present two types of tenancy deposit protection schemes available for landlords:- 1. The custodial scheme The landlord pays the deposit to the scheme administrator to hold for the duration of the tenancy. This scheme is likely to be used most by individual private landlords who do not use letting or managing agents. It is free to landlords and tenants and covers its costs by earning interest on the deposits held. 2. The insurance schemes The landlord or letting agent may hold the deposit, but must pay to join an insurance-based scheme, which provides cover for the return of the deposit to the tenant if the landlord or agent should fail to do so without good cause. Understandably, therefore, the scheme administrators require certain professional standards of members, making these schemes more suitable for letting agents and large-scale professional landlords. There are two insurance-based schemes: One, aimed at landlords, is run by Tenancy Deposit Solutions Ltd (www.mydeposits.co.uk), telephone 0871 703 0552, sponsored by the National Landlords Association. The second, aimed at letting agents, is run by The Dispute Service Ltd (www.tds.gb.com), telephone 0845 226 7837, sponsored by the industry professional bodies ARLA, NAEA and RICS.

What constitutes a tenancy deposit?

From 6 April 2007, new regulations controlling the holding of tenancy deposits came into force, as laid down by the Housing Act 2004. A deposit is any sum paid by a tenant as a surety against his failure to pay the rent or to breach any other term of his tenancy – often referred to as a ‘bond’ or ‘dilapidation deposit’.

I did not register my tenant’s deposit, is my s.21 notice still valid?

If the landlord fails to protect the deposit then the service of any section 21 notice may be deemed invalid and the court may dismiss a claim made under section 21. Once the deposit is protected, the landlord must provide the tenant with the relevant information that the deposit has been protected.

When should I register the tenant’s deposit?

Deposits taken by landlords or letting agents after 6th of April 2007 must be protected within 14 days.

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