dimitris Posted November 20, 2007 Report Share Posted November 20, 2007 My 2 tenants have decided to end the one year tenancy on the sixth month. I am still holding the deposit(450 pounds) of one of them. Do i have the right to keep that deposit because they have ended the tenancy earlier than agreed in the contract? Link to comment Share on other sites More sharing options...
J4L Posted November 20, 2007 Report Share Posted November 20, 2007 Not a chance dimitris! The deposit is a separate entity i'm afraid. They do however, remain responsible for the rent whilst they are signed into the agreement. The call now is yours really, You could attempt to re tenant the property and ask the existing T's for your 'reasonable costs' for advertising it etc. The only way really that you can not pay the deposit back is if you are aggrieved at the state of the place and have issues about that. Link to comment Share on other sites More sharing options...
GPEL Posted November 20, 2007 Report Share Posted November 20, 2007 So long as your agreement states that the deposit can be used to offset costs legally due to you then there's no problem. Do not return anything to the tenant, deduct what you need for damages if anything and offset the remainder against due rent until re-tenanted. They are liable for any rent differential between new and old agreement. Make sure you check with your deposit scheme that you are administering it correctly. Link to comment Share on other sites More sharing options...
J4L Posted November 20, 2007 Report Share Posted November 20, 2007 I would tend to disagree with you here GPEL sorry. A deposit is a deposit and shouldn't be used for rent arrears, regardless of whether the LL says " your agreement states that the deposit can be used to offset costs legally due to you " If the deposit has been held in a correct scheme I think the LL will find this when he writes to them. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 Was there a 6 mth break clause ? If not then ast still in place ...if rent not paid then it will still be VERY collectable ....although you have a duty to mitigate Losses ...ie try to find a new T asap ...clearly it is better to have prop occ not vacant .... I would inform T that they are responsible until prop re-let (upto end of ast fixed term--another 6mths) That means contract is not "ended" just yet ...also bill for re-let will be payable by existing T ...this is fair and accepted. If it takes 6 months to re-let then T will have to pay for 6 m rent ...Dep not refundable until END of initial fixed term (unless you agree otherwise) ....and then after all x's covered..and ast has really ended !!! I would tend to disagree with you here GPEL sorry. A deposit is a deposit and shouldn't be used for rent arrears, regardless of whether the LL says " your agreement states that the deposit can be used to offset costs legally due to you " If the deposit has been held in a correct scheme I think the LL will find this when he writes to them. What a Crock of Sxxt Ins scheme even has stated on Protection cert "earliest end of agreement" ie fixed term ...clearly not unprotectable until then ...no claim can be put on dep by either party until ast term agreed by both parties ...and as LL i would NOT be agreeing until new T found .... Deposit CAN be used to offset any debt on acc at end of term (whenever this may be ) .....as far as i am concerned and as per my ast .....(completely agree with GPEL) If for any obscure reason this should not be the case ......then i would issue letter giving 7 days for rent arrears/and all other outstanding monies to be received in cleared funds to my (LL) nominated acc...failure to do so will result in the immediate instruction of DC agent, plus all associated costs along with late payment fees and interest .... If i have a debt and a credit on an acc then clearly the balance is what is refunded ....if the debt is bigger than the credit ...there WILL BE NO CHEQUE GOING OUT ...more like an invoice ... S Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 Just found this, I think it is relevant !!!!!.....(THE LAW) Housing Act 2004 (8) In subsection (7)a 'deposit' means a transfer of property intended to be held (by the landlord or otherwise) as security for— (a ) the performance of ANY obligations of the tenant, or (b ) the discharge of ANY liability of his, arising under or in connection with the tenancy. Gareth (J4L) Please clarify "A deposit is a deposit and shouldn't be used for rent arrears" a source of reference for this ...? S Link to comment Share on other sites More sharing options...
J4L Posted November 21, 2007 Report Share Posted November 21, 2007 I stand corrected, I have just checked the DPS terms and conditions and found this. "Deposit means any single amount of money paid by the Tenant or a Third Party to the Landlord under the Tenancy agreement as security against the performance of the Tenant’s obligations under the Tenancy agreement, the discharge of any liabilities, any damage to the property and/ or non-payment of rent during the Tenancy;" So it appears that a deposit CAN be used to recover unpaid rent. Can I just add Simon When I disagreed with GPEL in a previous post I said "I would tend to disagree with you here GPEL sorry." I didn't use the words "What a Crock of Sxxt " It would do you no harm to address people in a polite and professional manner if you profess to be such. Terminology like this should be kept for the pub and not used on an open public forum. Your tone sometimes appalls me simon. Oh and it really annoys me. Let's try and show a bit of decorum shall we! Link to comment Share on other sites More sharing options...
pugsy Posted November 21, 2007 Report Share Posted November 21, 2007 Thank god for that J4L, I was beginning to think you'd really lost the plot - without meaning to get personal of course! I think Simon was flabbergasted as was I at your replies here. Shouldn't you have known that, 100%. For an agent you are awfully prejudiced against landlords, isn't that the preserve of tenants and the general public...? If we can't have an agent on our side, what hope is there? Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 When such a fundamental display of inaccuracy is thrust in my face ...then clearly one needs to respond accordingly ....!!!! Firm Fair.....straight,upfront and call a spade a spade !!!! next time i will keep it a bit more polite and just use : BS or "are you for real ?" that one was a much bigger crime than "why don't LL like pets?" and more affirmation as to why i self manage!!! Although it must be said that it is one point no-one reading this thread should now have any doubt about !!!!! Til the next time ! Pugsy : Correct my gaster was well and truly flabbered ! all part of the fun of the forum tho !! LOL S Let us hope that dimitris has revisited the forum to double check for an update and not issued payment on the basis of incorrect "advice" ..... Link to comment Share on other sites More sharing options...
J4L Posted November 21, 2007 Report Share Posted November 21, 2007 For the record I didn't advise anyone to refund the deposit now anyway, what I said that it is a seperate issue (and I still believe this) and each should be taken on it's own merits. I wouldn't have advised giving deposit back now anyway as the T is only half way through their agreement. The Deposit stays put until the end of the agreement unless the LL releases the T from such agreement and then should deal with the situation then. Pugsy, I'm not at all prejudiced against LL's (I am one, and ask the one's I already act for) Nor am I prejudiced against T's, (again, ask the one's who already let houses through us) I try and be fair and honest with LL's AND T's, that's my way and my perogative. Nobody, and I mean nobody, knows the whole story as yet with regard Deposit Protection schemes and as we go along we learn. Until we experience this for ourselves we cannot even begin to know everything (100%) Simon, I use a lot of foums (for various things not just property and lettings) and I use them to gain knowledge and experience etc. Generally they are areas where 'discussion' takes place concerning an issue and people can bounce ideas off each other. Since I started coming on this particular forum you have at times attacked me personally and been downright rude in some of your answers. I do not deserve this especially at times when I have tried to befriend you etc (check out your PM's) From what I can see/read my opinion of you is you are an opinionated, intelligent person, who thinks he is always correct and has all the correct answers. Thank god i'm not this way. I can take constructive criticism delivered in a professional way but not jokes at my expense or rudeness. Had we had many of our 'quibbles' face to face in a pub i'd have t***ed you a very long time ago, or at the very least stopped drinking with you. Unfortunately getting away from the forum is the only way out of this but I won't be pressured or bullied into this so for now I shall stick around. Just try a little decorum in your answers to me and I shall attempt to do the same. Not much to ask is it? Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 Flowers in the post ! S Link to comment Share on other sites More sharing options...
GPEL Posted November 21, 2007 Report Share Posted November 21, 2007 My background & experience in this sector means my advice and guidance is usually objective & correct... Unless I'm having a bit of fun. Sometimes several solutions to problems but good knowledge of the basics influences the most appropriate response. Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted November 21, 2007 Report Share Posted November 21, 2007 Flowers in the post ! S pansies or a wreath???? Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 I was thinking more in terms of "flowers herbal remedies" ... Back to thread ...... If you are only holding the dep on "one" of them has only one left ? Or have you already returned the other ? Need some more info to finish this one off !! Simon Link to comment Share on other sites More sharing options...
Matthew Posted November 21, 2007 Report Share Posted November 21, 2007 Just a thought, I take 2 months rent in advance and no deposit. This means I cannot charge tenant for damage of the property out of this money as it would then make it a deposit. I would have to re-imburse them and then charge them seperately. Is that right? although I could legally do it, I would then be breaking the TD rules and as such get screwed. I believe that this is the case, but this is a word of warning to those who operate as I do, be careful as if you charge the tenant for damage to the property out of the months rent advanced you will get done for 3 times the rent PCM. Please can somebody confirm this logic. Never had to do it, but would be good to know for sure. Thanks, Mat. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 Hi Mat You will only have that "deposit" until mth 5 begins and then you have NO COVER whatsover.....this can only be used to cover rent -not damages for the reasons you have identified... Any damages will have to be invoiced and collected as a seperate debt .... The only place where this system is of any use is if they leave early and then only if their rent is up to date ...if they plan their "early" move carefully they wont leave you with any "change" for repairs ...... We've been here b4 Mat !!!!!!!!!!!!!!LOL GET A DEP ! Simon Link to comment Share on other sites More sharing options...
GPEL Posted November 21, 2007 Report Share Posted November 21, 2007 Mat, what do you do at the next rent due date (start of month 2) when you've taken rent in advance? This influences how legislation views your method. Calling it rent in advance may still be viewed as a deposit if not handled correctly. For example, if you then took month 3's rent on the next due date and so on until the end of the tenancy you have effectively taken a deposit by default and in error if not registered even if you don't plan to take for damages from it. Likewise, if you draw down against the rent paid in advance for 2 months and then only take a month's rent in advance from the third rent due date and so on you wouldn't be seen as having taken a deposit. Hard to advise without full picture. Simplify for yourself & take a deposit. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 21, 2007 Report Share Posted November 21, 2007 I would think that as long as at the end of the tenancy all the advance rent is "used up" with none left over AND you ast says DEP=ZERO and clearly states what the advance rent sytem is then there will be no problems ?? Far easier to take a dep tho ........... Have to say this new system is seroiusly encouraging periodic Tenancies of which i am no big fan .... Link to comment Share on other sites More sharing options...
GPEL Posted November 21, 2007 Report Share Posted November 21, 2007 Agreed. Comes down to wording and compliance. If the funds held in advance on account are viewed as anything other than rent in advance you've got problems. Link to comment Share on other sites More sharing options...
Matthew Posted November 21, 2007 Report Share Posted November 21, 2007 I'll have to check the legailities of it then. But I assumed it is just the same as being 1 month in advance. But the tenants pay 2 months in advance, always. Only when they notify me they are leaving at the end of the 6 months, they don't pay the last month. If they are intending to stay, then the contract continues to the same terms, 2 months in advance always. Then when they let me know they are leaving I give them the 1 months rent back with no consideration of the state of the property. It is clearly stated in TA that 2 months rent in advance and there is no mention of deposit, as it isn't. I can't see there should be a problem with it, as if there is, then there is a problem with 1 month in advance too and we would all have to change to 1 month in arrears. Thoughts appreciated. Link to comment Share on other sites More sharing options...
GPEL Posted November 22, 2007 Report Share Posted November 22, 2007 Sounds OK in theory. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted November 23, 2007 Report Share Posted November 23, 2007 I'll have to check the legailities of it then. But I assumed it is just the same as being 1 month in advance. But the tenants pay 2 months in advance, always. Only when they notify me they are leaving at the end of the 6 months, they don't pay the last month. If they are intending to stay, then the contract continues to the same terms, 2 months in advance always. Then when they let me know they are leaving I give them the 1 months rent back with no consideration of the state of the property. It is clearly stated in TA that 2 months rent in advance and there is no mention of deposit, as it isn't. I can't see there should be a problem with it, as if there is, then there is a problem with 1 month in advance too and we would all have to change to 1 month in arrears. Thoughts appreciated. Unless 2 months notice given in which case no "cash in hand" so no refund and NO COVER ! Link to comment Share on other sites More sharing options...
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