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Grampa

Tenant fee ban and the 5 week limit for deposits

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Some of you will all ready be aware of the tenant fee ban coming in on 1st June 2019. But are you aware that within it there is also a rule that the max deposit you can take is 5 weeks rent. Thats fine for new tenancies but if you have a current tenancy with a higher deposit the portion of the deposit over 5 weeks will have to be returned to the tenant. The good news is you have  12 months grace until 1st June 2020.

The bad news is and this isnt just related to deposits (over 5 weeks) it relates to any fee that is taken (after 1st June 2019) that that shouldn't have been taken which could be ref fees, check out fees or any other charge during the tenancy. Or if you took a check out fee in advance on a historic on going tenancy.

*********YOU WILL NOT BE ABLE TO SERVE A SECTION 21.*********** Just another way on the growing list for judges, Shelter etc to get evictions struck out.

But with a lot of new laws they are not thought out or planned sensibility as the deposit schemes do not have a mechanism to allow part of a deposit to be returned.

  

 

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Thanks for that.

There is a wider issue here...specifically for those landlords that accept tenants with cats and dogs who traditionally have taken a larger deposit. Now that they won't be able to do that, tenants with pets are going to find it even more difficult to find a decent rental property.

I was talking to my lettings agents yesterday, seems there are so many problems at the moment.....Extra 3% stamp duty land tax, reduction in claim for mortgage interest tax relief, the economy, austerity, Brexit, additional legislation piled onto landlords,  etc etc. sales business for my agents is very subdued.

I was looking to buy a 2 bed terraced house in my area priced around £240k. By the time I add stamp duty,  legal fees and everything else it's another almost £10,000 added to the purchase costs. Like many other landlords i came to the conclusion it just ain't worth it.

There are more ways of making money than property.

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There is a work around solution to the pet issue you raise RL. You advertise the property with 2 prices which is apparently acceptable.

So you advertise the property normally at say £1000pcm and then right at the bottom of the property description and room sizes etc you add (in small print??)something along the lines of. The landlord of this property may accept pets and if agreed the rental prices would be £1015pcm.

After 18 months thats a extra 270 quid. (or whatever rate you set it to)

Our sales have surprisingly increased so maybe its just your area RL but there is always historically a bit of a spike at this time of year. 

 

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Brilliant idea with pets, I like it.

It could be just my part of Essex that is suffering a downturn in sales & enquiries. There are still a few professional landlords looking but they tend to offer very low prices, normal buyers seem very thin on the ground.

When you say there is a bit of a spike this time of year......Do you mean sales are normally more buoyant or less  ?......(fewer buyers is traditionally what we get here in Jan & Feb).

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Sales (new instructions) always pick up for us after xmas from about the middle Jan as we get a flurry of new instructions from the marital breakups over xmas and deaths of elderly people if there been a cold spell. I thought there would be more of a downturn due to the B word uncertainty. There appears to be no shortage of potential purchasers either. 

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I register all my deposits with believe it or not Mydeposits , I always have taken 6 weeks deposit and the amount is then secured, if I have to return 1 weeks deposit after 1 June how do I alter the given amount secured from 6 weeks to 5 ? 

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3 hours ago, kerbut said:

I register all my deposits with believe it or not Mydeposits , I always have taken 6 weeks deposit and the amount is then secured, if I have to return 1 weeks deposit after 1 June how do I alter the given amount secured from 6 weeks to 5 ? 

Well you have a years grace for existing tenancies  up 1st june 2020. I would contact mydeposits and ask them the question. I would be interested in their answer. 

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My Daughter is an EA for a large but local company. She has stated that after a traditionally quiet 2 months enquiries and sales have really picked up now.

Mind you the Honda factory closure is going to have a really serious economic effect on the local area.

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8 hours ago, Grampa said:

Well you have a years grace for existing tenancies  up 1st june 2020. I would contact mydeposits and ask them the question. I would be interested in their answer. 

Yes, thanks I will wait until Mydeposits issue some sort of directive after June 19 and before June 20 

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A thought around increasing the rent for animals,

I can see over the long term you can offset the greater risk / expence, but if a tenancy is shortish, just a few months the carpets will be shot and the cost not covered.

I have considered that T's with animals might be asked to buy the carpets from me, or for me if they're going down for a new tenancy.

 

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Can I run this by you ? its concerning fees being passed on to the Landlord after 1 June. I am considering this, the normal rent pre 1 June would be £800 pcm , with the charges being passed on to us ( agents fees, check in /out inventory, cleaning, tenancy agreement, guarantor agreement  etc )  I am considering adding 15% to the rent for the first 6 months making it £ 920 pcm after the initial 6 months when it goes periodic reverting to £ 800 pcm , thoughts please 

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The obvious question is .....will the market accept the rent increase ?

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3 hours ago, kerbut said:

Can I run this by you ? its concerning fees being passed on to the Landlord after 1 June. I am considering this, the normal rent pre 1 June would be £800 pcm , with the charges being passed on to us ( agents fees, check in /out inventory, cleaning, tenancy agreement, guarantor agreement  etc )  I am considering adding 15% to the rent for the first 6 months making it £ 920 pcm after the initial 6 months when it goes periodic reverting to £ 800 pcm , thoughts please 

I think they have covered this scenario. Nice try.

 "if the amount of rent payable in respect of any relevant period (“P1”) is more than the amount of rent payable in respect of any later relevant period (“P2”), the additional amount payable in respect of P1 is a prohibited payment."

"Where there is more than one later relevant period in respect of which the amount of rent payable is lower than the amount of rent payable in respect of P1—

(a) if different amounts of rent are payable for different later relevant periods, P2 is the relevant period for which the lowest amount of rent is payable;

(b) if the same amount of rent is payable for more than one later relevant periods, P2 is the first of those periods."

 

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So, come 1st June this year new tenacies will see a large general increase.

Not so good news for tenants.

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We sent the first couple of letters out to landlords yesterday informing them of an increase in management fees and a  suggested rent increased to mitigate it. Fingers crossed

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