Privacy Policy
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Sign Up13:09 PM, 16th March 2013, About 12 years ago
No I only ever use ONE ID.
I've no reason to hide behind any non-de-plume!
PETE TONG = WRONG; EAST END slang.
Perhaps I should stick to plain English!!?
Yes I always speak to the head honcho at the broker who gives definitive advice so any response I receive should be correct!
Mark Alexander - Founder of Property118
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Sign Up13:25 PM, 16th March 2013, About 12 years ago
Wow! - now playing catch up, more posts to read but in the meantime, a response to some of the points raised.
@Industry Observer - I totally concur that all new tenancies, including renewals which constitute new tenancies need the deposit to be re-protected as if the tenant was taking his/her first tenancy. With regards to issuing new prescribed information when a fixed term tenancy ends and becomes periodic, as you say, this has never been tested in Law but I have read the Housing act 1988 many times and can not deny that you have a valid point. You might think I'm crazy but I do not re-issue prescribed information in this scenario based on documented advice from MyDeposits. I can't deny that anybody wanting to protect themselves belt and braces though has nothing to lose, apart from a bit of extra hassle, if they follow you words of caution.
Regarding RGI - I'm not familiar with the intricacies of the underwriting criteria of all providers of RGI and rent protection warranties but I have looked into quite quite a few. Those I've seen all have a standard model whereby they reference the tenants and they either pass or fail. If they pass RGI is offered. If they fail, and a guarantor steps in, he/she does so on a joint and several liability basis. If the referencing then results in a pass the RGI is also offered on a joint and several basis between tenants and guarantors. I have not seen an RGI policy which absolves the tenants of liability and relies entirely on the covenant of the guarantor.
I will keep reading.
Mark Alexander - Founder of Property118
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Sign Up13:28 PM, 16th March 2013, About 12 years ago
@Paul Barrett - I have yet to find an RGI policy which will pay out once a tenant has surrendered possession. However, when tenants do a midnight flit, RGI will generally pay out until a possession order has been granted, providing of course all protocols are followed to the letter.
Mark Alexander - Founder of Property118
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Sign Up13:39 PM, 16th March 2013, About 12 years ago
More on RGI - once a claim is made you are in the hands of the RGI companies legal team whose job it is to obtain posession for you at the earliest convenience. If you refuse to accept surrender I doubt very much they will continue to pay out on the policy.
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Sign Up13:40 PM, 16th March 2013, About 12 years ago
Yes in my water I think that is how it is.
I am still going to pose the question though to my RGI company.
But I think you are correct.
So basically if you have RGI on your tenant; you request they don't give you a surrender letter or hand back one set of keys; allegedly.
Then they have done a moonlight flit!!
RGI claim may commence.
Of course no honest LL would do such a thing and no normal tenant would want a damaged credit situation.
Another LL might want RGI on the tenant; won't happen if the previous LL made a RGI claim.
Most good tenants would know of the hazard of damaged ratings caused by failure to complete a contract unless surrender is agreed with LL..
If tenant paid for the cost of sourcing another tenant for the LL then most LL won't mind if he tenant leaves early.
DC
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Sign Up14:06 PM, 16th March 2013, About 12 years ago
Industry Observer – here is the flak you invited, although I would rather refer to it as constructive conversation! Believe me though, I’m not trying to be deliberately controversial but I need to properly understand this confusing legislation myself.
With all due respect both you and I are anonymous bloggers on this site and advertise no qualification in respect of legal background or anything else for that matter, so in lieu of this all readers need to be able to refer to the actual wording of the law. As a matter of interest, although I wish to remain anonymous I have spent nearly 32 years involved in law so I am very aware that it is full of interpretation and misinterpretation.
Legislation is often badly written and leaves loopholes and gives get-outs for the less scrupulous in this world, resulting in stated cases, however until the legislation is amended we are only guided by stated cases. The important thing to remember is that case law is down to a person’s interpretation but it can be re-interpreted and re-stated at any time. It is not legislation in itself but guidance to legal advisers and Courts.
In respect of Johnson v Old, until I see what the Court of Appeal stated, this seems to revolve around a very badly drafted tenancy agreement, which said that the rent was to be payable monthly but it also had a separate clause stating that the rent should be paid six monthly in advance. I don’t really see the relevance of this case in Josie’s predicament. In any case I am sure if HHJ Simpkiss’ decision is overturned the landlord will take the matter to a higher Court.
As I said in my post, I need to be pointed in the direction of the written legislation that contradicts what Andy and I understand. Please show me where it is written that when the original tenancy expires but the tenant remains in situ, either on a new agreement or otherwise, that the landlord has received the original deposit once again. Section 213 of the HA 2004 is written in clear and simple English and surely means exactly what it says.
The Localism Act 2011 now clarifies certain other aspects of the HA 2004 in an attempt to simplify anomalies of the original and hastily drafted legislation. Please point me to the statute that states the deposit needs re-protecting as The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 which I assume you are referring to is only the wording for how the prescribed information has to be provided. Whether industry comment says one thing or another the law holds the definitive answer. The spirit of the 2011 legislation was to wipe the slate clean from 6th April 2012 and is the very latest wording to rely on in conjunction with the other Acts and Orders.
Also, you (and others), with all due respect once again, are interpreting matters in respect of a break in the deposit protection. A break is a break so surely if there is a break as mentioned in your “nano-second” point then it is a break whether for that mere short length of time or be it for a whole day. When a tenancy rolls into a periodic tenancy agreement it is seamless so this nano-second stuff is irrelevant. If there were any break in the protection then yes I can see that the tenancy deposit procedures would need to be complied with and a prescribed information form would need to be re-issued. The spirit of the 2011 Act is meant to apply common sense so none of this unnecessary rigmarole was intended as a requirement.
Unfortunately, it may be that we will see yet another amendment to clarify this particular point as well. Has such a case been to Court regarding a roll-over into a periodic tenancy where a re-issue of a PI was not carried out or does the wording of a good tenancy agreement cover this in any case?
I am satisfied that the tenancy agreements that I have in place are suitably worded, such that when the tenancy rolls over it is the same agreement and there is no break whatsoever requiring re-issue of the PI etc.
Anyway, to qualify my original post I did state that Josie should not return the deposit until she has sought proper legal advice and I stand by this good advice.
Mark Alexander - Founder of Property118
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Sign Up14:17 PM, 16th March 2013, About 12 years ago
@DC - I'm sure that Industry Observer is quite capable of answering this point himself, however, below is section 5 of the Housing Act 1988. Note how many times a statutory periodic tenancy is cited to be a new tenancy. Now it might well be that subsequent legislation has overwritten what s5 HA 1988 said and if you are certain that's the case please provide the necessary legislation and, as you said before, let's put this to bed once and for all if possible.
5. Security of tenure
(1) An assured tenancy cannot be brought to an end by the landlord except by obtaining an order of the court in accordance with the following provisions of this Chapter or Chapter II below or, in the case of a fixed term tenancy which contains power for the landlord to determine the tenancy in certain circumstances, by the exercise of that power and, accordingly, the service by the landlord of a notice to quit shall be of no effect in relation to a periodic assured tenancy.
(2) If an assured tenancy which is a fixed term tenancy comes to an end otherwise than by virtue of -
(a) an order of the court, or
(b) a surrender or other action on the part of the tenant,
then, subject to section 7 and Chapter II below, the tenant shall be entitled to remain in possession of the dwelling-house let under that tenancy and, subject to subsection (4) below, his right to possession shall depend upon a periodic tenancy arising by virtue of this section.
(3) The periodic tenancy referred to in subsection (2) above is one-
(a) taking effect in possession immediately on the coming to an end of the fixed term tenancy;
(b) deemed to have been granted by the person who was the landlord under the fixed term tenancy immediately before it came to an end to the person who was then the tenant under that tenancy;
(c) under which the premises which are let are the same dwelling-house as was let under the fixed term tenancy;
(d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and
(e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy.
(4) The periodic tenancy referred to in subsection (2) above shall not arise if, on the coming to an end of the fixed term tenancy, the tenant is entitled, by virtue of the grant of another tenancy, to possession of the same or substantially the same dwelling-house as was let to him under the fixed term tenancy.
(5) If, on or before the date on which a tenancy is entered into or is deemed to have been granted as mentioned in subsection (3)(b) above, the person who is to be the tenant under that tenancy-
(a) enters into an obligation to do any act which (apart from this subsection) will cause the tenancy to come to an end at a time when it is an assured tenancy, or
(b) executes, signs or gives any surrender, notice to quit or other document which (apart from this subsection) has the effect of bringing the tenancy to an end at a time when it is an assured tenancy,
the obligation referred to in paragraph (a) above shall not be enforceable or, as the case may be, the surrender, notice to quit or other document referred to in paragraph (b) above shall be of no effect.
(6) If, by virtue of any provision of this Part of this Act, Part I of Schedule 1 to this Act has effect in relation to a fixed term tenancy as if it consisted only of paragraphs 11 and 12, that Part shall have the like effect in relation to any periodic tenancy which arises by virtue of this section on the coming to an end of the fixed term tenancy.
(7) Any reference in this Part of this Act to a statutory periodic tenancy is a reference to a periodic tenancy arising by virtue of this section.
Industry Observer
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Sign Up15:35 PM, 16th March 2013, About 12 years ago
Thanks Mark I have spent far too long on this already and the arguments both ways have been well aired. As they say you pays your money and you takes your chance.
I agree with DC that the items are not directly linked and thought I had said as much, but they are certainly related. Johnson v Old does indeed revolve around a badly drafted agreement with conflicting clauses and sadly this means whatever the CoA decision it may well be that it does not satisfactorily answer some narrow points that many of us would like to see answered.
I have no legal qualificatioins as such, just ARLA qualified, was the National Rented Housing Manager for Nationwide many moons ago, and have been dealing with the legal end of lettings for 20 years.
As I say you pays your money. As I said many peole do not want to agree with what I purt forward as it is an inconvenience or nuisance to them - or means they have indeed committed unwittingly an offence.
You must all do as you wish I have no axe to grind and couldn't care less which way the legal decisions eventually go as and when they come along. I advise my clients according to what I think is correct backed up by at least two practitioners who I consider to be gurus on the legal side.
I am quite happy that when a tenancy goes periodic the old fixed term tenancy ends. I used to this on renewals it didn't matter and you could have 10 x 6 monthly agreements but you only had one 5 year tenancy provided of course the parties remained the same.
But that was shown to be wrong several years ago, a renewal is a new tenancy and so too, because the old fixed term one has ended, by simple logic the periodic tenancy MUST be a new tenancy whether any of us wish it, like it or we don't!!
Mark is quite correct and s5 of the 1988 Act makes several references to "a nerw tenancy arising". That seems pretty clear to me, so that means it is a new tenancy.
On any new tenancy the deposit must be protected and PI issued. I am not going to trawl through all the sections of the 2004 Act they are there for all to see, as I said where the waters get muddied is when TDP Schemes start ponmtificating on whether PI needs to be issued and advising it does not.
TDP is ALWAYS a two pronged sword, a double action is needed. Maybe you don't need to do much with the money, especucially if it is with DPS. BIt is because it is the same money physically that people in my view get confused and say it is already protected. Yes it was - on the OLD tenancy.
But reprotect according to what your scheme demands you do and above all reissue PI and you cannot be wrong - isn't that a comfortable position to be in until someoe tells you that you didn't need to do so all along? As opposed to the other way round?
I won't post any more on this subject and will remove my NOTIFY ME tick because I have simply spent too long on it. Pay your money and take your choice!!
Industry Observer
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Sign Up16:26 PM, 16th March 2013, About 12 years ago
Sorry one last post this was a contractual tenancy not an AST going SPAST at the end of the fixed term but the same principle would undoubtedly transfer and apply
DC
Here is the Case Law
Creation of Leases
When a periodic tenancy will arise
Macattram v London Borough of Camden
[2012] EWHC 1033 (Admin)
Summary
This case deals with liability for council tax. However, there are some interesting discussion on when a periodic tenancy will arise.
Camden leased a property for three years to house homeless applicants. On expiry of the lease, Camden ceased to use it for those purposes and it became vacant, but they retained possession and continued to pay rent. The question was whether this gave rise to a new tenancy or whether there were separate and successive leasehold interests.
More detail
At paragraph 17 (following Clarke v Grant [1950] 1 KB 105, CA) HHJ Robinson stated:
“The whole premise of the inference of a periodic tenancy which arises after expiry of a fixed term by virtue of the payment and acceptance of rent is that by their conduct the parties are taken to have agreed to enter into a tenancy.
Although the relationship of landlord and tenant continues, the agreement between them is not one of continuation of a previous fixed term that has expired, rather it is the commencement of a new and different term of years, a monthly periodic tenancy. Although that tenancy is on the same terms and conditions as the previous lease, that again is based on an inference from the party's conduct.
Those previous terms only apply insofar as they are not inconsistent with the terms of the new and different tenancy, namely the monthly periodic tenancy.”
DC
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Sign Up18:13 PM, 16th March 2013, About 12 years ago
Mark and Industry Observer, I’m still not convinced. I fully agree that periodic tenancies become new agreements but neither the quoted case law nor the 1988 Act deals with the issue of the deposit.
You are suggesting that to safeguard ourselves as landlords that only one aspect of the law needs to be dealt with i.e. provision of new PI, but you are disregarding other aspects of dealing with deposits that an end of tenancy requires. If as you say a periodic tenancy triggers the PI procedure then to be absolutely correct why don’t we have to pay back the deposit within 10 days of the end of the shorthold tenancy so that it can be paid by the tenant to the landlord once again?
I am aware of Sec 5 The Housing Act 1988 which is an explanation of a shorthold tenancy, and also explains periodic tenancies, however there has been much new legislation since 1988 that now deals with deposits. Sec 5 of the 1988 legislation does not mention that a deposit should be treated as being returned and paid to the landlord once again, which is my point.
Sec 213 of the 2004 Act deals with deposits but does not mention anything about tenancy agreements or periodic tenancies, just that a deposit has to be held in an authorised scheme:
“Sec 213 (1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.”
It is quite clear and relevant in determining that the payment of a deposit has to be a physical exercise and not an ethereal one, highlighted by these words; “.. paid to a person ..” and “.. when it is received ..”. It is only physically paid once at the commencement of the original tenancy and is never physically received again so anything other than that has not happened.
Mark, Sec 5 of the 1988 Act has not been overwritten; it deals with issues that are still relevant as you know, but the way deposits are now dealt with is contained within new legislation that came into force as a result of 2004, 2007 and 2011 Acts and Orders.
Thanks for all your comments and even if it is too late I will definitely sit down with my agent and discuss exactly where we stand in all of this. If we decide that a belts and braces approach is the best way to go I will take on board your advice.