View Full Version : Tenants deposit
03-04-2010, 15:51 PM
Just a quick piece of advice if possible.
My tenant is leaving a flaytI rent out. He originally left a £400 deposit which is protected but his brother wants to move in. They have both said to leave the original deposit where it is. Should I draw it out and then re-pay it in or put a 'nil' deposit on the new AST. I understand that the deposit would stay in original tenants name.
But whose name would the deposit be protected in? If you sign a new lease with the new person and you hold any kind of deposit it needs to be protected. And if you need to make use of the deposit when the second tenant finally goes it needs to be clear that the money you hold if for that purpose, otherwise you could be in all sorts of legal hot water. So yes - certainly refer on the lease to the amount held. With mydeposits.co.uk I know you can name any 'interested parties' in addition to the tenant, so that might be an option.
But to be honest, for the sake of clarity, assuming you're planning to return the whole deposit to the current brother I would ask for a letter from him stating that he wants you to transfer the amount to the incoming brother, just to cover yourself. Let them sort it out amongst themselves privately.
If you are making deductions however, I would make a clean paper trail and return the balance to brother 1 and then receive a new £400 from brother 2.
03-04-2010, 16:38 PM
If you are making deductions however, I would make a clean paper trail and return the balance to brother 1 and then receive a new £400 from brother 2.I would definitely do that anyway, for the sake of the paper trail.
If you end up needing to make deductions from the deposit when the new tenant eventually quits, the very last thing you want is any form of water-muddying caused by the wrong name being associated with the tenant. It's difficult enough these days for the LL to get money back from a deposit without any added complications. It's really a trivial matter for you to refund and repay in the deposit; it might cause complications for your tenant as he'll presumably need to provide a second £400 before the first £400 is refunded, but that's his problem not yours!
03-04-2010, 19:15 PM
Just a quick piece of advice if possible.
My tenant is leaving a flat I rent out. He originally left a £400 deposit which is protected but his brother wants to move in. They have both said to leave the original deposit where it is. Should I draw it out and then re-pay it in or put a 'nil' deposit on the new AST. I understand that the deposit would stay in original tenants name.
Ignore what the tenant and his brother say they want. A deposit protected against the original tenancy, in the original tenant's name, is worthless if you need to claim deductions for damage or arrears relating to the new tenancy with the brother. All manner of complications (none to your advantage) could arise if you do as they suggest.
Their relationship to each other makes no difference in the eyes of the law. They are separate individuals. So, treat them as though they were unrelated; carry out the check-out inventory as usual at the end of T1's tenancy, and return the deposit to T1 (less any valid deductions). Then check-in and take and protect a deposit from T2 against T2's new tenancy.
03-04-2010, 20:35 PM
I agree totally with Westminster.
However, you need to be aware that tenants are likely to give you grief because if the move-out day is (say) 25th, the deposit will not be returned to the 1st tenant until a good few days later even if there are no deductions.
You would be advised to ensure that the 2nd tenant gives you a full deposit on the move-in day - ie, the next day - before the original deposit is returned and well before DPS's cheque has cleared in 1st tenants account.
Agreeing to a deposit being paid once the first one is back and cleared would be suicidal - minimal chance of getting it and very little you can do in practical terms to put things right.
This is where I feel that Insurance based Tenancy Deposit schemes (TDS) are better than custodial schemes. (ie the landlord holds the money and pays to insure it rather than it being held by a third party who can take their time in refunding)
If you have a good relationship with a tenant and you trust them, you can return a deposit promptly (or maybe even in some cases, early). This can help them out no end if they need the cash for their next place.
Powered by vBulletin® Version 4.2.1 Copyright © 2014 vBulletin Solutions, Inc. All rights reserved.