Deposit protection on tenancy renewal?

[corrie]

Hi, any advice would be most appreciated. I let a flat to a married couple, who have been in occupancy for two and a half years. I have only just found out about the DPS legislation. I do not use a letting agent. The original AST agreement was for 6 months, and they chose to stay there and the agreement has been extended every 6 months since. The original agreement has not been re written, but both parties (them and myself), signed every 6 months, was is entitled “Extension of existing tenancy” The rent has not been increased during the tenancy, and the rent is often about 2 weeks or more late in being paid, often I have to chase them up. I put up with this because I think they are struggling a bit financially, and they have twins, which were born after they moved in. (They did not advise me the wife was pregnant, although I didn’t ask)
As the flat is only one bedroom, I would probably considered it unwise to let them have it, because it ios so small.
I am not sure if the deposit I originally received should be paid into one of the AST schemes, or, as the original agreement was dated prior to April 2007 can I hold it myself? If it should be paid into a scheme, can this be done now, without incurring the 3X deposit penalty, (which may be brought to the tenants attention by doing this)
Many thanks for any advice

[pcwilkins]

Originally Posted by corrie

I am not sure if the deposit I originally received should be paid into one of the AST schemes

Yes, it should.

or, as the original agreement was dated prior to April 2007 can I hold it myself?

The date of the original agreement is irrelevant --- you have signed a new contract since April 2007 and so TDS applies.

If it should be paid into a scheme, can this be done now, without incurring the 3X deposit penalty, (which may be brought to the tenants attention by doing this)

You will only incur the 3x penalty if the tenants notice and can be bothered to chase it up. Chances are they won't know about TDS either.

Peter

[Surrey]

Ah, but HAVE they signed a new contract, or merely extended the existing one? Perhaps we should wait for further advice from one of the legal beagles...

[corrie]

Originally Posted by Surrey

Ah, but HAVE they signed a new contract, or merely extended the existing one? Perhaps we should wait for further advice from one of the legal beagles...

According to the wording on the paperwork, I would consider that it is an extension of the existing (orignal) tenancy agreement

[Colincbayley]

Originally Posted by corrie

According to the wording on the paperwork, I would consider that it is an extension of the existing (orignal) tenancy agreement

Sorry, that is still not very clear.
Was a NEW AST issued or was it just agreed that the tenancy would go onto a periodic?

[corrie]

Originally Posted by Colincbayley

Sorry, that is still not very clear.
Was a NEW AST issued or was it just agreed that the tenancy would go onto a periodic?

The letter, signed by both the tenants and myself, was headed "Extension of existing tenancy dated 15th October 2006"

This states that an extension of the original tenacy has been agreed between the undersigned.

The format was one used by a letting agent I was advised by, but who I am no longer in contact with.

[pcwilkins]

Originally Posted by Surrey

Ah, but HAVE they signed a new contract, or merely extended the existing one? Perhaps we should wait for further advice from one of the legal beagles...

As far as I am aware, there are only three things that can happen at the end of an AST. If T continues to live in property paying rent, agreement becomes periodic (deposit does not need to be protected). If T moves out, agreement ends and deposit should be returned.

The only other option is for a new agreement to be formed, which I think is what has happened in this case. The new 6-month term indicates that a new contract has been signed --- the old one no longer applies because the time period mentioned in it has ended. Therefore a new agreement has been formed and the deposit needs protecting.

The letter, signed by both the tenants and myself, was headed "Extension of existing tenancy dated 15th October 2006"

I'm not convinced that this means anything.

The basic fact still remains that both T and L have signed a new piece of paper. That constitutes a new agreement, I reckon. But I'm willing to be convinced otherwise.

Peter

[Surrey]

As I see it, the only way for an "existing" AST to be "extended" IS for it to become periodic, so this letter would merely be a confirmation that it HAD become periodic.

One for the legal beagles, I reckon, and I'm not one. I think any tenant arguing that the landlord should have protected the deposit would be on a sticky wicket with that one.

Also, landlord should note that any notices to get the place back should be S21(1)(a) and not 21(1)(b), and should use dates as required for a periodic tenancy. The six months mentioned on the letter would actually not be relevant, for either the tenant or landlord as notice periods, so if your tenant gives you a month's notice at any time, as long as it follows the periodic rules they're allowed to do that.

I would suggest that the next time you feel the need to write any letters to the tenant, you should make it clear to them that the tenancy is, in fact, a periodic tenancy extending from the original one, and let them know of their rights, just to make sure you both know where you stand. If they don't want that and would rather have a new AST for a certain period then you'd have to issue a new agreement and protect the deposit.

[Colincbayley]

Originally Posted by Surrey

As I see it, the only way for an "existing" AST to be "extended" IS for it to become periodic, so this letter would merely be a confirmation that it HAD become periodic.

One for the legal beagles, I reckon, and I'm not one. I think any tenant arguing that the landlord should have protected the deposit would be on a sticky wicket with that one.

Also, landlord should note that any notices to get the place back should be S21(1)(a) and not 21(1)(b), and should use dates as required for a periodic tenancy. The six months mentioned on the letter would actually not be relevant, for either the tenant or landlord as notice periods, so if your tenant gives you a month's notice at any time, as long as it follows the periodic rules they're allowed to do that.

I would suggest that the next time you feel the need to write any letters to the tenant, you should make it clear to them that the tenancy is, in fact, a periodic tenancy extending from the original one, and let them know of their rights, just to make sure you both know where you stand. If they don't want that and would rather have a new AST for a certain period then you'd have to issue a new agreement and protect the deposit.

If not so sure, it could be viewed that signing the 'Letter' was the start of a new AST. Trickey!!

[pcwilkins]

Originally Posted by Surrey

As I see it, the only way for an "existing" AST to be "extended" IS for it to become periodic, so this letter would merely be a confirmation that it HAD become periodic.

I disagree. I think because the "extension" specified a new fixed term (i.e. another 6 months) that is clearly not a periodic agreement and so must be a new fixed-term agreement. If the "extension" merely stated that the original agreement continues indefinitely, that could be seen as a periodic tenancy and TDS would not apply.

I suppose what needs to be clarified is whether it is possible for a Tenancy to revert to a Statutory Periodic Tenancy having signed a "renewel document"

My opinion (and it is only my opinion) is that because the extension refers to another 6-month fixed term, it (by definition) is not an SPT.

The problem being here, is that a new tenancy MAY have been implied, even if it is not written.

I would argue that a new tenancy agreement has been written --- T agrees to rent and LL agrees to let property for another 6 months.

Peter