Tag Archives: tenancy

Take some of the guesswork out of TDP – and put it into identifying the politicians

Which Twentieth Century politicians were responsible for these particulalry apt quotes?

Faceless?
Which Twentieth Century politicians were responsible for these particularly apt quotes?

I know you don’t visit the NLA blog to read about politics, but the events of this week have repeatedly made me consider the contemporary credibility of two fairly well known quotes by two different but nevertheless well-known  twentieth century leaders. Neither of whom are regularly quoted in respect of the private-rented sector – but perhaps should be.

Those who frequent a variety of the blogs and forums discussing the PRS and have observed the speculation concerning the recent ‘Superstrike’ judgment will probably recognise why the first of these quotes seemed pertinent:

 

“I read a number of press reports and find comfort in the fact that they are nearly always conflicting”

Consequently, the NLA has spent a great deal of the last few weeks working with a number of equally committed representative bodies. We have opted to do this in order to reach a consensus on interpretation of this appeal judgment and it’s likely implications in order to avoid the kind of  unhelpful confusion which could otherwise occur.

I am glad to say that a briefing agreed by the NLA, UKALA, BPF, NALS, RLA, ARLA and RICS can now be downloaded here: DOWNLOAD

It is not every day that all of these organisations agrees to co-operate in this way, but it is testament to the desire to provide good quality, useful and consistent information to those living and working in the sector that we have all managed to come together.

Of course, as useful as information is, this is not the end of the need for co-operation on this issue. Having met jointly with the Department for Communities and Local Government, it is clear that we need to present a strong unified case for action in order to convince the Government that it needs to amend the legislation which has created this uncertainty.

To this end, the organisations above have also agreed to jointly survey their members to find out how many landlords and agents are likely to be effected – and to what extent. Hence my second memorable quote of the day:

“There is no limit to the amount of good you can do if you don’t care who gets the credit”

Please take a moment to help us do some good by answering four quick questions about your tenancies and deposit arrangements: CLICK HERE

Finally, for those of you who are interested in finding out which two famous former world leaders were responsible for the quotes above – answers on a postcard (or better yet in the comments field below).

How do you separate a Scottish landlord from his deposits?…….Ask Alex

David Kendall, NLA National Representative for Scotland, airs his views on the creation of Tenancy Deposit Protection in Scotland.

Good old Alex Salmond has done it again. He would hate to admit it but he just loves to copy the English! ‘If England has a tenancy deposit scheme, then so must Scotland’  he said – well not in exactly those words but you get the gist.

At the end of January this year, the draft legislation for a Tenancy Deposit Protection (TDP) Scheme was laid before the Scottish Parliament. With an election looming, the SNP rushed to make sure it was approved before they lost power. Except as we all now know, the predictions were not quite right and the SNP did what the ‘anoraks’ said was impossible and were returned with a majority.

So now landlords in Scotland are likely to be faced with a TDP scheme which will become operational sometime in 2012. However, of course Alex needed to make it a little different from England and there are some differences – which are bound to send the more unscrupulous letting agents running.

The new scheme will only be custodial. Landlords in Scotland are clearly not trustworthy enough to insure their deposits.

But it gets worse!

The scheme is also going to apply to EXISTING tenancies. Therefore, the millions of pounds which agents and landlords have spent on lavish cars, holidays, sorry I mean, put in designated accounts over the last few years, will  need to go into the scheme within a maximum of nine months of it going live.

Okay Mr Salmond, we know there will be no charge to landlords or tenants; we know the arbitration service is also free of charge; but surely you should have taken some responsibility. Who is going to publicise the scheme? Not the Scottish Government. No, the publicity must be provided by the scheme providers and reinforced by their desire to grow their market share.

Of course ignorance is no excuse for non-compliance, but relying on marketing alone to communicate the importance of protecting all new and existing deposits is bound to leave some landlords out of the loop. Which will have serious consequences.

If a landlord does not protect the deposit within 30 days of receipt the tenant can take him to court and will be awarded up to three times the value of the deposit. Alternatively, the tenant could wait until he has moved out of the property and then claim against the landlord within 30 days of leaving the property.

What this means is inventories are really going to need to be up to scratch. Detail everything in the property; the makes of appliances, model numbers, condition, everything. Make sure you take loads of photos. Most importantly, make sure the tenant signs everything when he moves in and remember all paperwork must have dates; do not preprint or write it in yourself.

In England and Wales almost all disputes which end in the tenants’ favour do so thanks to a lack of an inventory or the landlord failing to provide sufficient evidence to justify deposit deductions. So when it comes into force don’t try to ignore TDP, it won’t go away, and it is up to every landlord to make sure he protects himself from unnecessary litigation and cost.

For more information visit: http://www.mydepositsscotland.co.uk/home.aspx

Don’t get caught out – make sure your tenancies are legal

Mary Latham, NLA Regional Representative for the West Midlands, provides some top tips for ensuring your Assured Shorthold Tenancy Agreement (AST) does not fall foul of the law.

While there have been major changes to landlord and tenant law over the last 20 years, the legal focus is still on protecting the rights of the tenants rather than safeguarding the landlords business interests.

Therefore, it is up to me to protect myself and my business.

Tedious as it can seem, my best protection is a thorough paper trail and the most important document is the tenancy agreement; usually an Assured Shorthold Tenancy (AST). There is no legal requirement to use written AST but any landlord who lets without one is taking a huge risk.

ASTs should be written in plain, intelligible English and should clearly state all the important details. Most off the shelf AST’s are fairly straightforward when it comes to the basics. However, I find the ‘small print’ regularly causes problems, which can be significant should problems arise down the line.

If a landlord takes a tenant to Court based on a clause in the AST, the Court will look at whether that clause is ‘fair’. If the Court decides the clause is ‘unfair’ they will remove the clause and the landlord will not be able to rely on it.

For example landlords frequently include a term like: “The tenant will not keep any pets or animals”.

Although this sounds perfectly acceptable to many, as it represents a complete ban on keeping pets, it will be classed as unfair and the landlord will be unable to rely on it in Court.

This is easily remedied though, by adding the caveat:  “without the express prior written permission of the landlord which will not be unreasonably withheld”.  This demonstrates that the landlord is willing to consider their tenants request and should be deemed fair.

In my 38 years as a landlord I have seen many clauses in tenancy agreements that breach consumer protection legislation.

Here are three common unenforceable  clauses I have seen over the years which are almost certain to see a landlord’s case thrown out of court:

1. “Allow the landlord or his/her agent to enter the property with prospective tenants or to inspect the property, during reasonable hours, 24 hours notice will be given where possible”.

The words “where possible” cause problems here as tenants have a right to the quiet enjoyment of the property. A minimum of 24 hours written notice must be given

A landlord cannot enforce any term which requires a tenant to give the landlord access to the property. A landlord may only enter with the agreement of the tenant, or failing that a court order.

2. “At the end of the tenancy, following the return of keys to the landlord, if it is necessary for the landlord to deduct an amount from the deposit for the cost to make good any damage caused to the premises or the furniture the Landlord must inform the tenant in writing within one month of receiving keys and proof of payment of bills. The deposit will only be returned once all outstanding bills have been paid and proof of payment correspond with the final readings”.

This clause has two problems. Firstly, it breaches the Tenancy Deposit Protection rules. The undisputed amount of the deposit has to be returned within 10 working days – together with quotes and receipts to justify any amount to be withheld.

Secondly, if the tenant is the bill payer they have a separate contract with the utility provider meaning that the landlord is not responsible. Therefore you cannot require proof of payment before returning the deposit.

3. “In the event of the rent or any part of it being unpaid for more than 14 days after it has become due whether legally demanded or not if there shall be a breach of any of the obligations on the part of the tenant … the landlord may re-enter the property or any part of it in the name of the whole and immediately the tenancy shall end without prejudice to any other rights or remedies of the landlord”.

This one is straightforward – a landlord cannot repossess a property for any reason without a court order, this is misleading and cannot be relied on in court.

Do not risk writing your own agreement or using one you found on internet. Use a tenancy agreement that has been checked by legal experts to ensure that you do not fall foul of these regulations.

My advice would be to save yourself some time and trouble by using the free NLA AST on our website. Otherwise it could end up costing you hundreds if not thousands of pounds.

If you feel that you need to add clauses to this AST members can call the NLA Advice Line to make certain that your clause is legally enforceable.

It’s never too late….or is it?

You haven’t got to be particularly well-connected to realise that not all landlords are supporters of tenancy deposit protection (TDP). For many it remains as contentious today as when introduced in April 2007 – and recent developments are unlikely to help change those opinions.

As committed followers of events in the private-rented sector will be aware there have been a number of fairly high profile legal cases in recent months concerning TDP arrangements.

So, shortly before the country fell silent for the annual Armistices Day memorial, the Court of Appeal in London made sure it was heard in relation to the latest of these, the conjoined appeal of Universal Estates v Tiensia and Honeysuckle Properties v Fletcher .

Both cases involved the protection of deposit monies outside of the 14 days provided in the TDP scheme’s rules – but subsequently before the court hearing.

The court ruled, that in line with the earlier case of Draycott v Hannells Lettings, penalties prescribed in the Housing Act in relation to a failure to protect deposits cannot be invoked following late protection according to an individual scheme’s rules.

The result of this judgement is confirmation that landlords should not be ordered to pay three times the deposit amount as penalty for late protection – provided that protection takes place prior to the court hearing. This will come as welcome news to those landlords who have in error failed to protect their deposits immediately.

No need to protect deposits anymore then?

Wrong! The NLA cautions landlords that this decision is not a reason not to protect their tenants’ deposits – or to wait until they are threatened with court proceedings before doing so. TDP is still a legal requirement in relation to most ASTs and failure to comply with the scheme rules of their chosen protection company – which may still require protection within 14 days – could result in administrative penalties courtesy of that scheme.

Further more, Justice Thorpe advised tenants who may need to rely on the Court to enforce the legislation, that landlords should be expected to pay their legal costs.

Landlords should also remember that this case only looked at one aspect of the legislation and that there are numerous parts of the TDP rules which were not touched by this decision – including what happens if proceedings are brought regarding a tenancy which has already ended.

What now?

It is possible that the Government will amend the legislation at the root of these cases to clarify exactly what requirements are ‘in the spirit of the law’ but given the current agenda in Parliament this is perhaps unlikely to happen soon.

In the mean time landlords are advised to continue to register any deposits as soon as practically possible with one of the three Government backed schemes and to check the terms and conditions of their chosen scheme for any requirements which could lead to dispute in the future.