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View Full Version : AST rent threshold to increase to £100K but when?



westminster
21-03-2010, 01:50 AM
Anyone know whether it will happen on 6 April 2010, or 1 October 2010, or whether it might not happen at all if Labour lose the election?

Conflicting information here (http://blog.painsmith.co.uk/2010/03/14/housing-act-threshold-increase/) and here (http://www.residentiallandlord.co.uk/news2210.html).

(Here's hoping to get caught out by it, whenever it happens - would love to break the £25K pa barrier. Also look forward to lots of new deposit protection problems, as I'm sure they won't have thought that through...)

tom999
21-03-2010, 12:04 PM
My understanding is that on 1 October 2010 the AST threshold will rise to £100,000; this will apply retrospectively (i.e. to existing tenancies).

Any tenancy with an annual rate of rent: £25,000 to £100,000, on 1 October 2010 will become an AST overnight.

This means that all of the rights and responsibilities associated with the Housing Act 1988 will be extended to these higher rent properties.

Main consequences from this change in legislation:
* All landlords of these tenancies who have taken a deposit, will need to ensure that it is protected; and
* The eviction procedure will be as laid out in the Housing Act 1988.

jeffrey
21-03-2010, 20:44 PM
Maybe not. When the original 1988 Act wording (re RV) was changed in 1990 to a rent-based amount, by SI, the change was not retroactive.

tom999
21-03-2010, 21:04 PM
Conflicting information here (http://blog.painsmith.co.uk/2010/03/14/housing-act-threshold-increase/) and here (http://www.residentiallandlord.co.uk/news2210.html).The links actually concur:

Painsmith Blog: Housing Act Threshold Increase (http://blog.painsmith.co.uk/2010/03/14/housing-act-threshold-increase/)
"UPDATE: We are now given to understand that the necessary statutory instruments have yet to be finalised to bring the threshold change into force. However, the Government is intending to have these in place in time for 6 April with the intention that the actual changeover date will be 1 October."

Residential landlord (http://www.residentiallandlord.co.uk/news2210.html):
"The Assured Shorthold Tenancy (AST) threshold will rise to £100,000 on 1 October 2010 and this rise will apply retrospectively according to information given to the National Landlords Association (NLA) by the government."

This also concurs with:
(1)Tessa Shepperson's Landlordlaw Blog (http://www.landlordlawblog.co.uk/2010/03/12/news-on-high-rent-tenancies/):
"However the surprising piece of news is that the legislation will be retrospective So all tenancies where the rent is between £25,000 and £100,000 on 1 October 2010, on the day the changes are scheduled to come force, will change automatically into ASTs at that time."

and

(2) NLA: AST threshold will increase to £100k in October...and it will be retrospective (http://www.landlords.org.uk/news/pressreleases/2010/pressrelease-20100312astthreshold.htm):
"The Government has informed the National Landlords Association that on 1 October 2010 the Assured Shorthold Tenancy (AST) threshold will rise to £100,000. The rise will apply retrospectively."

westminster
21-03-2010, 21:07 PM
The links actually concur:

Painsmith Blog: Housing Act Threshold Increase (http://blog.painsmith.co.uk/2010/03/14/housing-act-threshold-increase/)
"UPDATE: We are now given to understand that the necessary statutory instruments have yet to be finalised to bring the threshold change into force. However, the Government is intending to have these in place in time for 6 April with the intention that the actual changeover date will be 1 October."
Ah, they must have posted that update today.

jeffrey
21-03-2010, 21:08 PM
However, all that may change w.e.f. 6 May.

westminster
26-03-2010, 13:42 PM
Here's the official amendment
http://opsi.gov.uk/si/si2010/uksi_20100908_en_1

It comes into force 1st October 2010, in England only, and also applies to tenancies already in place at that time, i.e. tenancies where rent is £25-100K on 30th September will be liable for deposit protection (etc) the day after.

And here's a blog commentary on it.
http://blog.painsmith.co.uk/2010/03/26/housing-act-rent-increase-order-published/

jeffrey
26-03-2010, 13:48 PM
also applies to tenancies already in place at that time, i.e. tenancies where rent is £25-100K on 30th September will be liable for deposit protection (etc) the day after.
If deposit was paid before 1 October 2010 but the letting thereupon becomes an AST, how can deposit protection apply thereafter?

westminster
26-03-2010, 14:46 PM
If deposit was paid before 1 October 2010 but the letting thereupon becomes an AST, how can deposit protection apply thereafter?

It says, in the explanatory memorandum (link in the first link I posted):


4.6 The Housing Act 2004 made provision for a tenancy deposit scheme for the purposes of safeguarding tenancy deposits. Landlords of all assured shorthold tenancies entered into on or after 6 April 2007 had to protect their tenants’ deposits in a recognised scheme. We consider that those common law tenancies entered into on or after this date, and which will become assured shorthold tenancies when the rental threshold is increased, must protect their tenants’ deposits in a recognised scheme. Failure to comply with this requirement means a landlord will not be able to use notice only possession to recover his or her property.

There's also this somewhat confusing paragraph:


4.4 The new rental threshold will affect the existing rights of those landlords and tenants who have already taken out tenancy agreements. We consider the proposed increase in rental threshold is prospective rather than retrospective because it will not affect the rights of tenants and landlords prior to its commencement.

As the PainSmith article points out, this may indeed create difficulties in terms of potentially exposing LLs to non-compliance claims.

jeffrey
29-03-2010, 12:23 PM
It's not before time that they put up the threshold. Too many landlords simply don't want to give tenants their deposit back at all.

I had an issue with my old landlord and after about 6 months of getting nowhere, I used a company called Recover My Deposit to take it on fo me.

I got the total amount back, no fees to pay and it too a matter of weeks.

MP
I bet that:
a. you; and
b. a company called Recover My Deposit
are one and the same!

Wickerman
29-03-2010, 15:07 PM
Just google his logon name - all reference the same company.

dominic
29-03-2010, 18:06 PM
I bet that:
a. you; and
b. a company called Recover My Deposit
are one and the same!

I hope he recovers deposits better than he can spell.

PaulF
10-06-2010, 22:17 PM
A Non-Housing Act tenancy that came into being between 15 January 1989 and 27 February 1997 that commanded an annual rent of between £25,000 and £100,000 is likely to become an Assured Tenancy from 1 October 2010 by default unless the landlord takes steps to do one of the following:

Operation of a break clause to evict the tenant. Serve a NTQ Obtain a Deed of Surrender from the tenant prior to signing an AST.

The deposit will of course have to be protected too.

No doubt landlords will wish to consult their legal adviser over such matters, and I'm sure extreme care will be the order of the day. Doing nothing will probably mean a tenant has considerable security of tenure and the landlord limited powers (grounds) for repossession. I wonder how many might fit into this category?

There would have been no requirement to serve a S.20 Notice at the time as it was superflous to the situation.

jeffrey
10-06-2010, 22:21 PM
Best to add this to http://www.landlordzone.co.uk/forums/showthread.php?t=10671&highlight=%C2%A3100
and then post to ask that LZ rename the thread.

mind the gap
10-06-2010, 22:24 PM
Best to add this to http://www.landlordzone.co.uk/forums/showthread.php?t=10671&highlight=%C2%A3100
and then post to ask that LZ rename the thread.

Blimey, he'll be working them subjunctives into every post, now :rolleyes:

jeffrey
10-06-2010, 22:27 PM
Blimey, he'll be working them subjunctives into every post, now.
Do you want that I make it so?