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View Full Version : tenancy deposit scheme- and one tenant swap



wildtypitch
08-05-2007, 12:44 PM
Just had an e-mail from my letting agents:-

The letting agents just recently renewed my tenants 1 year shorthold tenancy agreement on the 1st of April. completed before the new 6th april TDS. I still hold the original deposit. A few days ago I received this:

"One of your tenants is moving out and a new tenant taking their place. A supplemental agreement cannot be issued as this is covered by the new tenancy deposit scheme. We will therefore have to issue a new agreement. If you are still going to hold the deposit we would ask you to confirm where you will be placing it as required by law. Or we can hold the deposit under our Tenancy Deposit scheme. Please reply urgently!"

From what I've read so far concerning the new agreement, If a new agreement does have to be issued then I have no choice as to whether I keep the deposit or I enter a tds scheme. I must enter the scheme, right? I'm unclear as to my choices as landlord.

Thanks

wildtypitch
08-05-2007, 13:03 PM
just to add I have a standard insurance policy with my letting agents that assures rental income and is it possible that it also covers me and the deposit, which means that it counts as an insured scheme, and part or that scheme requires that they must be informed or where the deposit is held?
thanks again

jeffrey
08-05-2007, 13:18 PM
Just had an e-mail from my letting agents:-

The letting agents just recently renewed my tenants 1 year shorthold tenancy agreement on the 1st of April. completed before the new 6th april TDS. I still hold the original deposit. A few days ago I received this:

"One of your tenants is moving out and a new tenant taking their place. A supplemental agreement cannot be issued as this is covered by the new tenancy deposit scheme. We will therefore have to issue a new agreement. If you are still going to hold the deposit we would ask you to confirm where you will be placing it as required by law. Or we can hold the deposit under our Tenancy Deposit scheme. Please reply urgently!"

From what I've read so far concerning the new agreement, If a new agreement does have to be issued then I have no choice as to whether I keep the deposit or I enter a tds scheme. I must enter the scheme, right? I'm unclear as to my choices as landlord.

Thanks

Let's assume that you first let to X and Y. Now X wants to go and Z wants to replace him/her.
Rather than new AST letting, you could permit X+Y to assign existing AST to Y+Z. You as landlord should join as party, to release X and take new covenants from Z. Y+Z should covenant to indemnify X against future rent etc.

wildtypitch
08-05-2007, 13:40 PM
They say in their email that they cannot do a suplimental agreement. I guess this means assigning a new group of tenants. Is this true?

"We cannot not do a supplemental agreement and this is covered by the new tenancy deposit scheme."

jeffrey
08-05-2007, 13:51 PM
They say in their email that they cannot do a suplimental agreement. I guess this means assigning a new group of tenants. Is this true?

"We cannot not do a supplemental agreement and this is covered by the new tenancy deposit scheme."

They cannot do it- but it can be done. Assignment means old AST continues, so no TDS malarkey. If you need help, send me a private message.

Esio Trot
08-05-2007, 14:08 PM
They cannot do it- but it can be done.

They probably just looked at the commercial element - most (all?) agents use software to automatically generate agreements and other paperwork.

To construct the assignment and get it correctly completed and executed probably needs senior staff input, not the normal property clerk - hence time x staff input = no profit.

wildtypitch
08-05-2007, 15:30 PM
Sorry to bother you again guys. You've been invaluable over the last hour or so. They still insist that this still counts as a new tenancy.
Quote:
"I understand what you are saying but the tenancy deposit scheme says this still counts as a new tenancy. If you are adamant that we do not change it, please confirm that you will do the paperwork with the tenants direct"

Are they being lazy, this should not be a problem. This is the first time I've asked them to do anything. I would do it myself but for three reasons

1.I've paid them well and never hassled them before
2.I'm not in the country at the moment so cannot
3.They work for me and its their job to know the law.

So far I can't find anything that stipulates that the change of one member of an household constitutes the need for a new AST. The idea seems pretty strange and seems to go beyond the basics of the law.
They should know full well what is needed and some of the people their are seem to be quite experienced.
Should I demand that they do it?

If I don't does that mean I'll have to settle for an TDS and hand over the money. Or as they initially said let them know where it is held (by that are they implying which TDS scheme is it held, I can't hold it myself can I!)

Sound like they just want to get their hands on more money. They tried this last year before the TDS came into place saying that I would have to hand it over in aug 06'. But they never approached again.

Thanks

jeffrey
08-05-2007, 15:38 PM
You could always:
a. ask the Agents where the TDS says that Assignment=new letting (which it doesn't); or
b. ask a solicitor to knock-up a suitable Assignment Deed.

wildtypitch
14-05-2007, 09:29 AM
My estate agent disagrees with me still
"We were advised that ANY new tenancy that comes into effect after the 6th of APRIL cannot be attached to an AST that does not meet with TDS guidelines( old AST's)"
But they have got the new tenant to sign the AST and say that they are happy to go along with this if I am sure that the information I have received is correct and that I'm happy to go along with it.
They made the tenant aware of the fact that I will be holding the deposit. Am I safe from the treat from the TDS?

Thanks again

jeffrey
14-05-2007, 09:44 AM
My estate agent disagrees with me still
"We were advised that ANY new tenancy that comes into effect after the 6th of APRIL cannot be attached to an AST that does not meet with TDS guidelines( old AST's)"
But they have got the new tenant to sign the AST and say that they are happy to go along with this if I am sure that the information I have received is correct and that I'm happy to go along with it.
They made the tenant aware of the fact that I will be holding the deposit. Am I safe from the treat from the TDS?

Thanks again

BUT it's not a new tenancy, as I've already explained ad nauseam. It involves only the Assignment of an existing tenancy. This should make you safe from the treat (or even the threat) of TDS consequences.

Esio Trot
14-05-2007, 10:15 AM
I agree about the assignment - but if the OP was my landlord, as this is not a standard document and would need my input to construct it (unless he pays for a solicitor) I would expect to charge at least an hour of my time, probably two (£50 an hour).

To protect the deposit is just £23.50. By far the cheaper option.