TDS, TDS, DPS or .... TDS?

[Wickerman]

Just firming up our procedures for dealing with deposits, and a thought occurred to me....

When the deposit schemes were named, did it not occur to anybody that naming two schemes with the same initials was a bad idea? I mean, if you call one "the disupte service" (a really CRAP name by the way, indicating a dispute will automatically happen) and one "Tenany Deposit Solutions" and have a general coverall name called "Tenancy Deposit Scheme", you have a receipie for confusion.

Just my £0.02 worth.


I have already seen magazines get really confused (getting TDS and TDS mixed up, and getting "scheme" in the context of "scheme operator" and "scheme type" ("eg there are two types of scheme, insurance backed and custodial" and later in the same article "the TDS scheme...."). I have also noticed lots of "advertising" (sorry editorial :) ) that misses out the existence of one or more of the schemes, especially where the magazine has a vested interest in one of the organisations (eg mortgage express who have some kind of a linkup with the NLA - their magazine only mentions the NLA insurance backed TDS scheme, not the other TDS scheme).

[jeffrey]

No good will come of any of this nonsense. Villains wil continue to vill and innocents still lose out. My preference remains to recommend clients to avoid it all by:
a. taking no deposit but using MARAS insurance or something like it; or
b. letting to companies, universities, and local authorities; or
c. letting on SATs, losing s.21 powers;
but (b and c) dealing with deposits just as before the 2004 Act.

[jeffrey]

What are the other downsides to using a SAT?

None apart from losing s.21.
It is still an assured tenancy, within the meaning of the Housing Act 1988. Section 8 therefore still applies.
Even better: if L is a former owner-occupier, serve a pre-letting ground 1 Notice and you'll have the same rights that s.21 would have given.

[lorenzo]

SAT

statutory assured tenancy?

<edit> question answered.

[jeffrey]

statutory assured tenancy?

Nearly.
"Standard Assured Tenancy" to distinguish from "Assured Shorthold Tenancy".
The Housing Act 1988 created the concept of Assured Tenancy, ie letting governed by that Act.
The law therefore determines whether a letting is or is not within the Act. See parallel thread re TDS, for example.
Most lettings which are within the Act are deemed to be ASTs. L can however serve a Notice (or incorporate a clause) rebutting this deeming and switching into SAT (ie the parties' actions determine what sort of letting it is).

[Miffy]

No good will come of any of this nonsense. Villains wil continue to vill and innocents still lose out. My preference remains to recommend clients to avoid it all by:
a. taking no deposit but using MARAS insurance or something like it; or
b. letting to companies, universities, and local authorities; or
c. letting on SATs, losing s.21 powers;
but (b and c) dealing with deposits just as before the 2004 Act.

I considered the insurance route, but I am convinced that having a deposit from the T will concentrate their mind. Even if claiming under the TDS were more trouble than it was worth, the T cannot rely on this.

Letting on SATs-sounds like a recipe for heartache. Almost everyone on these forums always seems to refer to S8 procedures as virtually guaranteed to come out in favour of T with S21 therefore being the only guaranteed way to go. Is this just rampant pessimism, then?

[attilathelandlord]

Letting on a SAT is madness. It would be better to deal with the deposit admin or take no deposit than let on a SAT.

Even for someone who is two months in arrears, judges will not necessarily give you possession if you have an assured tenant.

[Esio Trot]

What are the other downsides to using a SAT?

For most BTL mortgages you will be in breach of the conditions!

[attilathelandlord]

That's true Esio, they all state AST or company let. Good point.