Rent Payments:

The ongoing TSB IT banking crisis is causing anxiety for both tenants and those landlord affected by this. Some tenant customers of the TSB bank have had their standing orders returned, leaving them unable to pay their rent and other bills.

Tenant customers are furious with TSB because not paying their rent puts them in breach of their tenancy agreements and potentially puts them at risk of being served notice.

Of course, given these exceptional circumstances, landlords should be expected to be understanding and make allowances for this, but tenants should nevertheless be prepared to warn their landlords at the earliest opportunity. However, some landlords will find themselves in difficulties because of this as many rely on regular rent payments to make their mortgage payments.

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Some tenancy agreements have default payment fines, meaning that in theory a tenant can be fined for payment delays. But regardless of whether the landlords is understanding or not, responsible tenants will be anxious because the incident may impact badly on their relationship with their landlord.

As the TSB’s computer meltdown entered its second week some frustrated customers are still unable to access their online banking accounts or make payments. Some businesses banking with TSB are facing problems paying wages, and employees not getting paid are therefore unable to pay their bills.

The crisis arose after a switch over to a new computer system following the bank’s split from the Lloyds Banking Group. Although TSB management said that systems would be “up and running” soon, last week, the problems have persisted into a second week and TSB have had to call in experts from IBM after the Spanish company tasked with the changeover have so far failed to find a solution.

In addition to the issues with standing orders, TSB has also said that some mortgage customers were unable to access their accounts online or via the TSB app, and some credit card holders had problems viewing information.

The bank has promised to compensate those affected.

©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.

2 COMMENTS

  1. I appreciate TSB’s failing is an inconvenience all round (to say the least!)

    What I am about to say is probably/hopefully academic, also i am not a lawyer and not qualified to provide legal advice.

    There is a difference between the tenant paying rent by standing order as a voluntary act and the tenant payment by standing order as stated in the tenancy agreement (or lease).

    Where a tenancy agreement or lease requires the rent payment by standing order, effectively the landlord is requiring the tenant to use an intermediary to transfer the money to the landlord. I don’t think the tenant can be held responsible for the reliability of the intermediary – any more than the landlord can. However, I would think the landlord does have a a duty of care (implied, but even so) to ensure that the required method imposed on the tenant for transferring the payment to the landlord is 100% reliable. Consequently, any attempt by a landlord to claim breach of covenant would surely fail.

    The same principle applies to an loan/mortgage agreement between landlord and lender. Provided, of course, that the terms of the loan agreement require the landlord to pay by standing order. If not then it would be up to the lender…

  2. My rent went out of my account on the 2nd of May – TSB business account.
    TSB should have a new IT team to look after their online business. While the were working on it, they allowed users to login. Anyone with common sense should have directed the website to a static maintenance page till the website is fixed.

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