Landlady wants to move deposit! Please help

rl290

Hello,
An American friend of mine who is living in London is having some serious problems with his landlady, so I said that I'd post his story here with he hope that you good people may be able to offer some advice.

My friend and two other people have been renting a flat in central London for 4 months. Their contract is 12 months long, with the LL able to evict them with 2 months notice from the 6th month onwards. However, because the total value of the rent is over £25,000 for the whole year (quite common in 3-bed central London properties) this is NOT an AST I think.

Currently the deposit (of £3,600) is held in the name of the estate agent. Before Christmas, my friend received a letter from the LL asking him and his flatmates to sign a document allowing her to move the deposit into her name. He has not acted on this, and tomorrow the LL is having a meeting with the tenants. She has made it clear that, should they not sign, she will serve notice on them to move out when the 6 months are up.

Obviously this is quite fishy... a great worry is that the LL is trying to get cash fast (for mortgage payments?) or that she will be tough to deal with in getting the deposit back at the end of the tenancy. The estate agents have been bringing prospective purchasers of the property around in the last few weeks.

I have already told my friend to phone shelter, which he will try to do before the meeting. I have also suggested that he may wish to ask for proof that the LL has permission to let / a buy to let mortgage to ensure they will not be kicked out in the event of a repossession. There is also the option to refuse to let any more purchasers view the property while they are living there (I assume a clause saying that they have to do this in their tenancy agreement is void?). Changing the locks is an option for this, I guess? Can anyone provide any more help??

Thankfully my friend won't be walked over, and would rather move out after the break clause and find somewhere else to live than give into the LL. So any helpful advice will be acted upon!

Thanks in advance,
R

Fire_Fox

What exactly does the document say? The landlord is legally obliged to lodge the deposit in one of the three schemes, she can move it but she cannot legally keep it in her own account or use it for her own purposes. Are they being asked to release the deposit as you would at the end of a tenancy or for the landlord's permission to move the deposit? They may like to check the procedure with the deposit scheme itself. Your friends have no obligation to allow viewings on the property, they have the right to quiet enjoyment which overrides any clause in the AST.

rl290

FireFox, thanks for the quick reply. The Tenancy Deposit Scheme does NOT cover rental agreements where the total annual rent is over £25,000 as in this case... so the deposit is not in one of the 3 schemes and does not need to be. This is a big problem in London where ASTs do not apply to many rentals. The deposit is currently held by the estate agents, and the letter he is being asked to sign will put the deposit into her name.

Thanks for confirming my thoughts on not letting viewings.

R

Fire_Fox

I agree don't let the landlord near the deposit if she is trying to sell the house!

clutton_2

i suspect that legally they are under no obligation to agree to the deposit being moved...

however, the LA works for the LL and as the 2004 Act does not apply, there is a possibility that it could be quite legal for the LA to pass the deposit to the LL if the LL is no longer employing the LA.....

without the protection of the deposit legislation your chums are open to landlord abuse of deposit.....

""The estate agents have been bringing prospective purchasers of the property around in the last few weeks.""

this sounds as if the LL has already decided to sell.... and that OP should expect notice to be issued soon......

he should check to see if a SEction 21 notice was given to him at any stage, if so, come back and tell us the date of the original tenancy and what the S21 says....

if LL is being awkard about deposit... tenant Could be awkard about viewings - as tenants have a legaly enshrined right to Quiet Enjoyment and need not let anyone in, let alone the LL/LA or prospective purchasers.......

rl290

Thanks Clutton,
the original tenancy agreement says that Section 21 of the Act is not applicable to this tenancy?! I presume this is because it is not an AST due to the rent being too high...

From what you and FireFox have said, as well as my own views on the matter, the tenant should stand firm, refuse to sign the document and refuse to allow viewings while the issue is outstanding.

R

clutton_2

over on the forum on www.landlordzone.co.uk there is a specific poster called Jeffrey, very short on words, but massive on wisdom and law, who is a solicitor... he will know the answer to your questions....

he does a pay-as -you-go phone service also.. but i suggest you post a thread on there first...

in the meantime... ignore LA and LL until you know more about your rights.....

good luck

rl290

Thanks again - I have posted over there, so let's see what they say.

R

G_M

What does the contract say? This is what matters in this instance.

Your friends have a Bare Contractual Tenancy because of the rental value. It is NOT an AST.

A useful thread here.

Deposit Protection Scheme does not apply.
S21 does not apply.
Legislation protecting the tenant does not apply.

The only thing that applies is the contract.

Does the contract say the deposit will be held by the agent? If so, that is enforcable and the tenant should not sign away that (limited) protection. If the contract is silent on the matter, then nothing stops the LL taking over the deposit.
What does the contract say about landlord access (ie for viewings)? If it says the landlord has a right to access (eg at 24 hours notice or whatever) then it is allowed.

Sorry to bring bad news, but that is the law re Bare Contractual Tenancies

princeofpounds

G_M and clutton are right.

Here is something I would rarely advise, but depending on how your contract is structured you might wish to consider paying the last month's rent out of the deposit and leaving the emphasis on the landlady to collect deposit deductions.

Yes this has risks of antagonising the landlady (though I think she will be antagonised anyway if unreasonable requests are refused) and of getting a reference afterwards (may be a problem anyway).

But it might be something that is a necessary step.

Also consider one more issue - it might be that the landlady is having problems with the letting agent.

adg1

rl290 wrote: »

the original tenancy agreement says that Section 21 of the Act is not applicable to this tenancy?! I presume this is because it is not an AST due to the rent being too high...

Does it state that 'Section 21 of the Estate Agents Act is not applicable in this Tenancy'?

If so, it is simply the declaration of interest from the agent that there are no connected parties. I doubt it would have any info on Section 21 Notice as that is only applicable to an AST.

G_M and Clutton are right. You have a Contractual Agreement. Read it thoroughly and look for mentions of the Deposit and who the holder will be.

G_M - Is 'quiet enjoyment' not applicable here with regards to viewings?

princeofpounds wrote: »

Also consider one more issue - it might be that the landlady is having problems with the letting agent.

Is it a large letting agent? If they are small they could well be struggling with the economic climate. If the deposit is not held in a bonded scheme or by the agent in a separate stakeholder account then it is at risk if they collapse.