Trenners Posted March 30, 2007 Report Share Posted March 30, 2007 Hi, I have just received an email from The Deposit Protection Service - the company running the custodial scheme - confirming that Statutory Periodic Tenancies (ie: tenancies that run on beyond their initial fixed term) created from Assured Shorthold Tenancies signed before 6th April will not be affected by the new legislation. What was interesting though was that they also say that if you EXTEND a tenancy on, or after, 6th April 2007 by "letter of memorandum" to the same tenant, at the same address and with the same deposit (ie: you have not increased the deposit) then the new legislation will not apply to that deposit. What this means is that we can let all of tenancies lapse into Statutory Periodic Tenancies or, if we want to extend, then we can use a memorandum of extension rather than getting the tenants to sign a new agreement. In summary, it means that the legislation is going to apply to "new tenancies only". Hoorah ! Mark Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted March 30, 2007 Report Share Posted March 30, 2007 Hi Mark This is excellent news - as most of the agents and Landlords i know are far from ready for the "TDS" with no systems in place yet - one agent i spoke to this week had not even heard about it ! boy this is going to be interesting! and gives us some breating space ! Out of interest can you give me a total and breakdown of exactly what you as agent would charge a tenant for fees set up- ref - lease - check out etc I am trying to establish a fair amount to charge a tenant for the time and effort it takes to set up a tennancy "properly"? Simon Simon Link to comment Share on other sites More sharing options...
BTLWhizz Posted March 30, 2007 Report Share Posted March 30, 2007 Hi Mark This is excellent news - as most of the agents and Landlords i know are far from ready for the "TDS" with no systems in place yet - one agent i spoke to this week had not even heard about it ! boy this is going to be interesting! and gives us some breating space ! Out of interest can you give me a total and breakdown of exactly what you as agent would charge a tenant for fees set up- ref - lease - check out etc I am trying to establish a fair amount to charge a tenant for the time and effort it takes to set up a tennancy "properly"? If you buy a car does the car dealership charge you for the time and effort it takes to complete the paperwork? Or is that a standard cost of business that should be included in the upfront costs. Link to comment Share on other sites More sharing options...
Trenners Posted March 30, 2007 Author Report Share Posted March 30, 2007 Hi rodent / BTLWhizz, For a long time I stood by the principle that tenants should not have to pay any agency fees - and I still stand by this for tenants claiming Housing Benefit as they are the people who can least afford to pay. When dealing with HB tenants I spend less on marketing - because the Council simply provide me with the tenants - so I can afford not to charge a fee (and the Council refuse to pay a fee). Having said that - as my business, overheads and staff grew - I soon realised that my business could not afford to work for the, private, tenants for nothing. So we charge private tenants £150 per tenancy .... not per tenant! This £150 setup fee is used to perform credit checking, create the tenancy agreements, check the tenants into the property, contribute towards an inventory / schedule of condition being written (the landlord and tenant are charged 50% each for this service), read and notify the utility companies, collect all the monies associated with the tenancy and also, at the end of the tenancy, check the tenants out again ! Hope that helps .... lots of agencies charge more than us .... some agencies charge less than us. You will note that we do not charge the tenant for securing their deposit within a deposit protection scheme - we charge the landlords for that service !! Mark Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted March 30, 2007 Report Share Posted March 30, 2007 Well to be honest at present i don't charge any thing for these services, all i charge for is the referencing - but with the amount of extra admin and potential "dispute" work that is about to arrive -this is about to change !! hence the reason for the question ! And yes i completely agree "upfront costs" should cover it and from now on they will ! If you set up a loan or a mortgage do you have a valuation fee(£3-£400) - a set up fee (1.5% nowadays -£1500-£4500) i dont think a tenant would even pay these sorts of figs as a deposit let alone what we do and pay it as a FEE ! Ref - Trenners earlier comments elsewhere - treat it as a business and run it as a business - can only wholeheartedly echo these comments! LOL Simon Hi Mark Great on a 2 bed flat - but with a 6 share HMO that 150 doesn't cover the referencing ! When you say £150 and refer to 50-50% i presume you mean £150 each (L & T)? If so £300 in as set up fee? Simon Link to comment Share on other sites More sharing options...
CH1 Posted July 13, 2007 Report Share Posted July 13, 2007 Hi, I have just received an email from The Deposit Protection Service - the company running the custodial scheme - confirming that Statutory Periodic Tenancies (ie: tenancies that run on beyond their initial fixed term) created from Assured Shorthold Tenancies signed before 6th April will not be affected by the new legislation. What was interesting though was that they also say that if you EXTEND a tenancy on, or after, 6th April 2007 by "letter of memorandum" to the same tenant, at the same address and with the same deposit (ie: you have not increased the deposit) then the new legislation will not apply to that deposit. What this means is that we can let all of tenancies lapse into Statutory Periodic Tenancies or, if we want to extend, then we can use a memorandum of extension rather than getting the tenants to sign a new agreement. In summary, it means that the legislation is going to apply to "new tenancies only". Hoorah ! Mark Sorry to drag this old post up..but hey it shows that the 'search' function works on this forum! I have an AST that started before 6 Aprill 2007, and my tenant wishes to extend their contract after the current ones ends in 2 months time. If I use another new 6 month AST will that mean I have to use Tenancy deposit scheme for the deposit they originally paid? Or what is another way of extending the contract legally without having to use a Tenancy deposit scheme? and how do I do it? By just writing a Letter of memorandom myself and getting tenant and me to sign? Slightly off topic but do I need to inspect the property before I agree to another 6 months? Link to comment Share on other sites More sharing options...
Trenners Posted July 13, 2007 Author Report Share Posted July 13, 2007 Hi CH1, If you create a new Assured Shorthold Tenancy then you will need to protect the deposit. If you extend the existing tenancy on the same terms (ie: you don't increase the deposit) then you don't need to protect the deposit. A simple tenancy extension document - between landlord and tenant - extending the existing tenancy (on the same terms as defined within the existing tenancy agreement) should do and will mean that you don't need to protect the deposit. Hope that helps ...... PS: You should always perform regular management inspections of your investment properties - every 3 months at a minimum - if for no other reason than checking the tenants have not established a cannabis factory (see previous posts on this topic). Good Luck, Mark Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 13, 2007 Report Share Posted July 13, 2007 I reckon it takes around 24 hours to "establish" a cannabis factory - Keep an eye on the curtains - if they are never open - book an inspection! You can get an ast directly from ths site ...FREE...!! Simon Link to comment Share on other sites More sharing options...
CH1 Posted July 13, 2007 Report Share Posted July 13, 2007 Hi CH1, If you create a new Assured Shorthold Tenancy then you will need to protect the deposit. If you extend the existing tenancy on the same terms (ie: you don't increase the deposit) then you don't need to protect the deposit. A simple tenancy extension document - between landlord and tenant - extending the existing tenancy (on the same terms as defined within the existing tenancy agreement) should do and will mean that you don't need to protect the deposit. Hope that helps ...... PS: You should always perform regular management inspections of your investment properties - every 3 months at a minimum - if for no other reason than checking the tenants have not established a cannabis factory (see previous posts on this topic). Good Luck, Mark Thanks Mark, I think I'll extend the exsiting tenancy as long as both me and they have a legal leg to stand on. This is the first time I'm doing this so how do I extend the tenancy -is there some standard form available or do I write and print on myself. And regarding the management checks what do I say? and how much notice do I give? I presume I go when they're there? (or sneak in when they're out;) Edited to add: If I raise the rent slightly I assume I cannot extend the original AST as the terms have changed, so is the only way to use a new AST if I want to raise the rent? but then I have to join a tenant deposit thing? I am looking at ways to keep control of the deposit myself just in case, I have full intention of returning the full deposit. Link to comment Share on other sites More sharing options...
CH1 Posted July 13, 2007 Report Share Posted July 13, 2007 I reckon it takes around 24 hours to "establish" a cannabis factory - Keep an eye on the curtains - if they are never open - book an inspection! You can get an ast directly from ths site ...FREE...!! Simon @ canabis Think I'll be ok its in that appears to well managed building with active managment, but you can never be too sure. Great news about Free AST! Wow, this is a great site. Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted July 14, 2007 Report Share Posted July 14, 2007 Ok so we now know we can extend a tenancy pre april we can also do a rent increase via a section 13. Is there a way to move a tenant from one property to another on old AST??? A long shot I know but I'm sure if their is a way one of you guys will know. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 14, 2007 Report Share Posted July 14, 2007 AH now then ...............a very interesting one .... You can just about get away with "de-camping" if you have major repairs or decoration in the first property HB will certainly accept this ! ie all paperwork stays on first prop while they temporarily stay at alternative address - i had one guy on HB decamped for 8 months while we gutted his flat and renovated it.....with HB still paying as if he were resident in first prop.... But just how far you can stretch it - i dont know ! If the reason behind all this is to hang onto deposit - then just goto www.my deposits.co.uk and pay your £30 and stop complicating life - then start charging an extra £30 on set up fee to cover it ...you will get far more respect from T for doing the job properly & you can put the rent up. Link to comment Share on other sites More sharing options...
GPEL Posted July 14, 2007 Report Share Posted July 14, 2007 On BTL Whiz's point, do car dealerships charge for the documentation? Well actually yes some do, Citroen charge a documentation fee. Ask a business to help you then don't be suprised if they ask you to pay for it. Link to comment Share on other sites More sharing options...
J4L Posted July 14, 2007 Report Share Posted July 14, 2007 On BTL Whiz's point, do car dealerships charge for the documentation? Well actually yes some do, Citroen charge a documentation fee. Ask a business to help you then don't be suprised if they ask you to pay for it. yes GPEL some do and it's disgusting. I have bought 4 brand new motorbikes from dealers in the last 2 years and every time they've charged me £45 for admin/documentation but can't answer me when I ask them 'what's it for'? Link to comment Share on other sites More sharing options...
Whitey Posted August 28, 2007 Report Share Posted August 28, 2007 Hi CH1, If you create a new Assured Shorthold Tenancy then you will need to protect the deposit. If you extend the existing tenancy on the same terms (ie: you don't increase the deposit) then you don't need to protect the deposit. A simple tenancy extension document - between landlord and tenant - extending the existing tenancy (on the same terms as defined within the existing tenancy agreement) should do and will mean that you don't need to protect the deposit. Hope that helps ...... PS: You should always perform regular management inspections of your investment properties - every 3 months at a minimum - if for no other reason than checking the tenants have not established a cannabis factory (see previous posts on this topic). Good Luck, Mark Hello all I'm dragging this discussion back up as I found it really useful as it is now applicable to me. Some advice would be very much appreciated. My question is this... I have a tenant who's AST lapsed and is now therefore statutory. They want to extend for a fixed term but want to move in a flat mate to share the rent. Am I able to do this via an extension to the existing agreement and therefore avoid having to join the TDS? Thanks Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted August 28, 2007 Report Share Posted August 28, 2007 Hmmmm If you change the rent or tenants - as you will need to do(to add new tenant then theoretically you should draw up a new lease - which means that you will come under TDS rules... However if the tenant gives you a letter of notice for "the fixed term" period and has flat mate "staying" as his guest (albeit contributing to the costs )..direct to your existing T.. AND the rent remains the same then i dont see how you could come under TDS rules !!! BUT tread carefully as you potentially will have a sitting tenant ... Someone who knows more than I will probably give you a more sensible answer ! Simon Link to comment Share on other sites More sharing options...
Trenners Posted August 29, 2007 Author Report Share Posted August 29, 2007 Hello all I'm dragging this discussion back up as I found it really useful as it is now applicable to me. Some advice would be very much appreciated. My question is this... I have a tenant who's AST lapsed and is now therefore statutory. They want to extend for a fixed term but want to move in a flat mate to share the rent. Am I able to do this via an extension to the existing agreement and therefore avoid having to join the TDS? Thanks Hi Whitey, By adding a new tenant to the tenancy means you are changing the terms of the tenancy (because the tenancy is now between the landlord and different / additional tenants) and you _must_ protect the entire security deposit. Probably not the answer you were hoping for ... but the correct answer nonetheless ! Best Wishes Mark Link to comment Share on other sites More sharing options...
Whitey Posted August 29, 2007 Report Share Posted August 29, 2007 Hi Whitey, By adding a new tenant to the tenancy means you are changing the terms of the tenancy (because the tenancy is now between the landlord and different / additional tenants) and you _must_ protect the entire security deposit. Probably not the answer you were hoping for ... but the correct answer nonetheless ! Best Wishes Mark Thanks Chaps Not really the answer I wanted to hear but as I have promised them they could have a flatmate I guess I'll need to go through with it. Another couple of questions if I may... Do I now need to go and do a full assessment on the property and re-write / update the inventory snd get to new tenant to sign it? Do you recommend taking photo's? What is the process for paying the deposit i.e do I return it to them and they pay to a TDS or do I just choose a TDS and pay the deposit in there myself? What is the best TDS? Thanks again. Alex Link to comment Share on other sites More sharing options...
Trenners Posted August 29, 2007 Author Report Share Posted August 29, 2007 Thanks Chaps Not really the answer I wanted to hear but as I have promised them they could have a flatmate I guess I'll need to go through with it. Another couple of questions if I may... Do I now need to go and do a full assessment on the property and re-write / update the inventory snd get to new tenant to sign it? Do you recommend taking photo's? What is the process for paying the deposit i.e do I return it to them and they pay to a TDS or do I just choose a TDS and pay the deposit in there myself? What is the best TDS? Thanks again. Alex Alex, My advice is to formally end the old tenancy and create a new tenancy - complete with a new inventory / schedule of condition. By all means take photos if you feel it necessary - although how you can photograph an entire carpet in enough detail to prove that the small red wine stain was not on the carpet at the commencement of the tenancy is beyond me. Regarding tenancy deposit protection - you have 2 choices. Either register and pay the money over to the The Deposit Protection Service - details on this can be found at http://www.depositprotection.com or you can join the Tenancy Deposit Solutions scheme (at http://www.mydeposits.co.uk) and then INSURE the deposit. If you decide to take out the insurance policy then you can keep the deposit money yourself (and earn interest from it) but it will cost you more money than simply sending the deposit off to The Deposit Protection Service (which is free to use but they keep the majority of the interest from the deposit). Alternatively ............ you could decide not to take a deposit at all (in which case you wouldn't need to protect it). I hope that helps .... Mark Link to comment Share on other sites More sharing options...
Whitey Posted August 30, 2007 Report Share Posted August 30, 2007 Thanks Mark - really appreciate the advice. One last question - on the subject of not taking a deposit which is certainly one of my options. What is your view of the iGurantee (tenant guarantee scheme)? Cheers Link to comment Share on other sites More sharing options...
Selkirk Posted August 30, 2007 Report Share Posted August 30, 2007 Hi Whilst on this subject, is there is a difference between a deposit, which has to be secured someway, and a tenant paying rent in advance, which doesn't need to be secured (I think). What I trying to get at is, instead of taking one's months 'deposit' and then one months rent for the coming month, can I take two months rent in advance, one for the coming month plus one for the following, therefore the T is paying two months in front instead of one at first and then pays one month thereafter but it's for the second month ahead? I just think if you get a bad T and they leave the place in a mess you end up in the same position whether you have a deposit or rent in advance anyway. cheers Link to comment Share on other sites More sharing options...
Trenners Posted August 30, 2007 Author Report Share Posted August 30, 2007 Hi Selkirk, Rent is rent and a deposit is a deposit. If you take 2 months rent in advance - are you really trying to disguise the deposit as rent ? I think so as you plan to make deductions from the rent to compensate you for damage that the tenant does to your property ... which means the rent in advance was really a deposit. Regarding iguarantee - I have not tried the scheme myself but it does seem a sensible way of selecting better quality tenants. Personal recommendation (from another landlord that you know and trust) would be another solution ..... Good luck, Mark Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted August 31, 2007 Report Share Posted August 31, 2007 Just put a clause in your AST that the 2 months are pament for the first and last months rent - this cannot br construed as ..OR USED as a "deposit" merely negatives the oportunity for t to not pay last months rent and force you to use deposit to cover it ......That's my story and i,m sticking to it ! You then have deposit to cover damages as usual and will have to protect it ...like everyone else !!! iguarantee ....not for me for lots of reasons even though on paper it offers far more then conventional "deposit" it,(like custodial) has real logistical problems which are inherent with "problem tenants" .....(see other threads for details ...i think "deposit schemes - who's doing what" ) Thru experience i am already very aware of the huge advantage and benefits of actually holding the "cash" myself (using ins scheme ) although this costs £30 a pop the cost is seriously out weighed by the control you have over the situation when problems occur - 3rd party meddling in my affairs is never going to be encouraged by me .....as I'm sure many on here will agree with! eg Just had a house police discovered as a cannabis factory - had £1500 bond "in hand" so no probs sorting that one out - Just imagine trying to get that out of custodial or ig ...bearing in mind T is extremely unlikely to be seen again making it a single claim !!....which is far from straight forward or immediate ....Nope ,not for me thank you !!! Or another T who left a huge burn in my carpet ...has now moved out and we have no fowarding address ....so how do we get her to sign deposit back to us ? another single claim .....There are going to be millions and millions ..( i am not exagerating here !!) of pounds "stuck" in these schemes ..thats your money .....also because you cant get your hands in it ..you are going to have to dig into your own pocket to pay for repairs etc until you mabe get the money from custodial or ig .........that does not seem like good business to me and can be avoided by paying a measely £30 HMMMmmmm now someone is going to say "yes but you have to pay the disputed amount into the scheme" well .....i think you will find that "most" of the problem tenants will just "dissapppear" as per usual and this is going to be the exception rather than the norm ....and also the average person suffers from a dreadful condition called inertia .......If i deduct £50 from a bond for cleaning and give them the rest ......how many are actually going to go to the trouble to get it back thru ins scheme ....i would also wager that the average t will have lost the ast and dep cert within weeks of moving in .... Would be very interested to here from people on problems regarding protecting deposits ..but guess it will be october b4 we start to see problems beginning !! So far i have had 3 protected dep ptential probs (2 cannabis factories and one burnt carpet ) all sorted and admin nightmare completely averted.... THE REAL WORLD FOR YOU !! Simon Link to comment Share on other sites More sharing options...
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