Rental deposits to be capped at one month’s rent

Reply to the comment left by "Ian Cognito" at "23/06/2017 - 10:54":

Openrent, who I use frequently have a YES/NO question relating to benefit claimants - does this mean they will have to delete that question?

Reply to the comment left by "Maria O'Neill" at "26/06/2017 - 13:36":

While the conditions of many BTL mortgages forbid letting to benefit recipients I don't see how this question can be outlawed. Having said that, my local newspaper does so for private individuals though not for lettings agents. Most private advertisers seem to get round it by stating they require proof of earnings.

Let me put it simply. Two properties, total cost of refurb due to tenant damage £15,000. Total deposits received from tenants £1,800.

Total rent received (a tenancy of 22 months and one of 18 months) £21,550.

Subtract mortgage interest, agent fees, service charges, etc. You do the maths.

Reply to the comment left by "Mark Puddephat" at "01/07/2017 - 22:15":

I've done the maths, Mark. The total monthly rent is £539 for 2 properties (i.e. £21,550 / 40) which seems extraordinarily low. The total deposits are, therefore, in excess of 3 months rent.

However, against damage of £15,000, you will be considerably out of pocket whatever the deposit.

I remember vaguely a story from a long while ago. VAT changed and became chargeable on fish and chips.

A chip shop owner decided to charge salt and vinegar (zero VAT) at the price of fish and chips and give the fish and chips away.

HM Customs and Excise took a dim view.

I'm sure there are many flavours of tenancy agreement.

We probably use the most common 6 month AST where rent is monthly in advance,1.5 months deposit.

Our experiences are generally good but as others here have had some painful moments.

It is clear with absolutely no consultation that a lot more damage can be done that is covered by1.5 months rent. And yes, we have had tenants not pay the last 1.5 months rent and skedaddle then play difficult with the DPS.

We have had tenants:

- Introduce pets on the quiet

- Agree to leave on a particular date, leave earlier then refuse to pay the bills for the time they aren't in the property but still hang on to the keys.

- Leave behind significant debts with energy and water services who then refuse to hand back control of accounts without my producing the tenancy agreement, passport and property deeds. In one case a solicitor's letter to the power company was required (the validity of which was challenged, apparently I could have written it to get of paying)

- Get themselves into all sorts of personal difficulties leading to debt collectors arriving after their departure.

- A fellow landlord recently had a spurious claim of dilapidation brought against them in response to serving notice to leave for non-payment of rent. It was more than life was worth to prove otherwise. Mutually agreed to drop cases against each other and allow the tenancy to come to reach its natural end.

- Take guarantors to court, get judgements and be offered £5/month followed by the promise of going bankrupt (and therefore not get £5/month)

- Tenants leave but refuse to sign an end of tenancy agreement leaving us in limbo.

- Tenants using pseudonyms to obtain goods by deception but using the rental address.

- Tenants just disappearing with no forwarding details or refusing to provide forwarding details.

- I was recently door-stepped by an angry landlord demanding to know why I had given an ex-tenant (who did a moonlight flit) a glowing reference. The reference was forged.

We haven't had any drugs issues but otherwise I could go on for hours.

I am completely unfamiliar with the fine legal details of relevant housing acts but I thought these acts were carefully crafted so that everything is a double edged sword; or more positively - a balance of power.

So what are the checks and balances and are these now antiquated and not fit for purpose?

In response to the noises being made regarding a deposit cap and the populist anti-agent fees movement presumably to be followed by rent controls what should I do with the next tenant?

- Can I ask for 6 months rent up front and 1 months deposit?

- Can I make the tenant cough up for an insurance policy to cover dilapidations that are not wear and tear?

- Should the tenant be legally obliged to provided verifiable forwarding details?

- Landlords cannot ask a Power or water company how it's going. Similarly with council tax - data protection act. Although a landlord can make themselves an account user for gas and elec provided in the agreement ... but the tenant has to make the running. Anyway, why should I have to run other people's lives, I have my own children.

- How deep, broad and onerous can the referencing be?

- Can landlords take additional deposit from guarantors?

- Should guarantors be mandatory?

- What is the point of a CCJ ? It costs time and money to put evidence together, you have to pay for the court fees yourself. If the ex-tenant/guarantor is miles away when you bring a case against them you have to go to a court near them at your time and expense. If you win (no one is a winner) and there is no fabricated counter claim to deal with (at your expense) then it costs you money to get what you are owed.

- There is no defence against pseudonyms and the unfortunate baggage they bring with an apparently good prospective tenant.

- Forget the patronising 'British-ness test' and passport checks, should all tenants be made to sit for a basic qualification in addition, subtraction and personal cash flow management before they are allowed to rent?

Rant rant

Basically it seems to me that I will be trying to raise the bar without discriminating. Raising the bar doesn't stop the owner of Sports Direct being an able candidate tenant. Equally, it won't stop him from vomiting into my fire place.

I see the sun and yard arm have long since converged

bfn

Hamish

Reply to the comment left by "Hamish McBloggs" at "04/07/2017 - 19:46":

Wow!

Reply to the comment left by "Ian Cognito" at "02/07/2017 - 16:07":

Subtract mortgage interest, service charges, agent fees and repairs, and I am severely out of pocket. But the flats are nicer after the repairs than they were before, and command better tenants and higher rents. At least that is one consolation.

It seems that my common denominator for damage to property is twenty-something with small children. That is a recipe for neglect in my experience. And these flats were trashed though neglect, not malice.

Reply to the comment left by "Ian Cognito" at "04/07/2017 - 21:19":

Chardonnay ... mmmmellow now. And there are now two yard arms.

I have to talk to a tenant tomorrow and ask what the plan is regarding slowly incrementing arrears. They aren't bad tenants and their family unit has just increased in number by a delightful daughter.

I hope we are good landlords allowing slack but now deposit < arrears.

Should I be a 'cold' business or unacknowledged (by government) social support?

Hamish

Not exactly a solution but a deterrent to leaving the last month unpaid, I think that I will be insisting that all rent is paid through something like Credit Ladder - i.e. payment history becomes part of your credit record. Would not work for all tenants but mine are generally young professionals who mostly value their credit ratings at least a little.