Section 21 notice problems

Szlazo

Pre 2006, a deposit bond was taken by myself as landlord for a house which I rented on 6 months tenancy agreements. The last agreement was signed in Dec '07 (based on a 2002 agreement) and ran to 30/06/08, because of rent arrears and financial needs due to mortgage costs increasing, I decided that I would not be renewing the tenancy agreement and gave tenant 2 months written notice to vacate the property.
This did not happened and the tenant was served with a Section 21 notice, she has now appealed on the grounds that we have not held the deposit under the new tenant deposit scheme which came into effect in April 07. The expired agreement makes no reference to the deposit and I was unaware of the scheme and have not taken any deposits since the initial payment in 2005. A court hearing is scheduled for mid September and I am concerned that I will be fined 3 months rent for breach of the legislation when she owes me over 3 months rent!!! Help any advice very welcome.

silvercar

Two options.

1. Protect the deposit now, so that by the court date the deposit will be protected. Recent cases suggest you will not then be fined and the section 21 will stand.

2. Go to court and let the judge decide. You are in a bit of a grey area. On one side of the fence sits the deposit scheme operators and some big charities like Shelter, who think that on a renewal post April 2007 the deposit should be protected. On the other side of the fence, including some landlord associations, there is the view that deposits taken before April 2007 don't need to be included in the scheme according to the letter of the law.

In court it could go either way.

Szlazo

Thanks for the advice. I think that I will take option 1 and protect it now before the court date.;)

clutton_2

if she owes you rent - then issue a Section 8 as well - as a judge may rule that you cannot issue a Section 21 if you have not protected the deposit at the right time

superdry

Doesn't the deposit have to be protected inside 14 days of receiving the deposit?
(I'm assuming that if a tenancy has been renewed after 2006 it's at that stage that the deposit should have been protected?)

clutton_2

the l2004 Housing Act says that a deposit needs to be protected within 14 days - but there has been a case where the judge ruled that as long as it was protected before the case came to court that the LL was not in breach of the law.

we await further rulings wiht interest

SquatNow

clutton wrote: »

the l2004 Housing Act says that a deposit needs to be protected within 14 days - but there has been a case where the judge ruled that as long as it was protected before the case came to court that the LL was not in breach of the law.

Basically the judge was a landlord who chose to re-interperet the law because he didn't like it.

You can't issue a section 21 until you have protected the deposit. once it is protected (which if you knew about it when you wrote the first post, it should be by now as you've had enough time to do it.)

Once you've protected the deposit you can then issue a section 21 giving them 2 months notice.

And then you can send the tennant their cheque for 3xdeposit... suggest you ask the tennant if they will negotiate... basically just get them to leave straight away and call it quits... which is a best case scenario for you.

the worst case scenario is they take you for 3x the deposit and refuse to leave forcing you to get an eviction order.

Also you say "financial needs due to mortgage costs increasing".... you're not another amatuer (no offense) who thinks that just because their mortgage has gone up they can raise the rent to cover it?

tbs624

superdry wrote: »

Doesn't the deposit have to be protected inside 14 days of receiving the deposit?
(I'm assuming that if a tenancy has been renewed after 2006 it's at that stage that the deposit should have been protected?)

The legislation is poorly worded: read SilverCar's post above for a good summary

Just as tenants who are in rent arrears can effectively knock back possession proceedings by paying a small amount off prior to the court hearing, from some tenancy deposit cases it would appear that LLs can ignore the 14 days limit and so long as they register the deposit before the court hearing no "fine" will be due.

SquatNow

tbs624 wrote: »

The legislation is poorly worded: read SilverCar's post above for a good summary

Just as tenants who are in rent arrears can effectively knock back possession proceedings by paying a small amount off prior to the court hearing, from some tenancy deposit cases it would appear that LLs can ignore the 14 days limit and so long as they register the deposit before the court hearing no "fine" will be due.

Technically the fine would be due it's just most judges are also landlords.

Thus the judge in the first case basically ignored the law and made up one that suited him.

If the tennant had had a decent lawer (I believe they were doing the case on their own) they would have made a fool of the judge and made him replace himself with someone who didn't have a vested interest in the outcome of the case.

The catch is the amount of money involved would rarely cover a lawers fees for the day.

We need a lawer to do it pro-bono, or a group of tennants to club together and do it class-action style.

Szlazo

My problem is that I do not want to raise the rent. My tenant had missed two rent payments before our agreement expired. So when it finished, I decided not to renew and have not had a single payment since. My finanial position is that we need to sell the house as we cannot pay the mortgage without rent to cover it!

Szlazo

Oh and by the way, Thanks very much for all your help and answers. It is appreciated!!