No 'bond' - just two lots of "rent"?

Huscarl

I don't know if anyone has heard of this before. I was intrigued and thought I'd post it here to see what others thought.

In July 2007 a work colleague of mine privately rented a studio flat (in South Yorkshire)- bathroom and toilet included- which was brand new at the time, he was the first tenant.

He and the landlord signed the tenancy agreement and £600 (plus bills payable by the tenant), stated on it, exchanged hands, half cheque (1st month's rent up front), half cash -the landlord never used the word 'bond' for this sum, but explained in some convoluted fashion that it was the second month's rolling rent?

He nevertheless signed up and moved in, thinking that as long as the signatures for the money were on the tenancy agreement, he would be ok and that he would get the £300 'bond' back.
No 'bond' meant no bond scheme for the landlord to put the money into (despite the new Private Landlord law of April 2007 whereby a bond must be placed into one of three schemes within 14 days!)

When it came time for him to move flats 18mths later (after a happy time there and having cared well for the place) with permission from the landlord after giving a month's written notice, he didn't receive his 'bond', as no such thing was payable on signing up!!

I, he, nor his lawyer (or anyone else!) have never even heard of this 'rolling rent' thing before?
So, all because of the 'bond' not officially being a 'bond' it has gone to the small claim's court, the landlord- who stubbornly refuses even now to accept that a bond was paid- is spitting feathers saying that he is being cheated and that he does not owe £300, nor was a bond paid?

Could £300 of the original sum (which, incidentally, the landlord mysteriously repaid part of!!) be interpreted as being anything other than being a 'bond', despite the wording?

DVardysShadow

Look at the evidence. What is the proof that this £300 cash was paid? It looks to me like the Landlord may have pulled a fast one. If it can be shown that the £300 cash was apid, then it might be worth looking at the legalities. But if this can't be proved, the rest of it is moot.

Or am I missing something?

Huscarl

It is due in the small claims court soon.

There is no mention of bond on the tenancy agreement, just the two lots of £300.

The brief and colleagues told my friend that no-one had heard of such an arrangement before?

G_M

Huscarl wrote: »

It is due in the small claims court soon.

There is no mention of bond on the tenancy agreement, just the two lots of £300.What does it say the 2 x £300 is?

The brief and colleagues told my friend that no-one had heard of such an arrangement before?

Come on! Read the agreement and tell us what it says! What receipts did he get? What did they say?

Either the money was rent in advance, in which case he can match up how much total rent he's paid and how many months he's been there, OR it was not rent in which case it must be something else - bond/deposit, credit vetting fee, inventory admin fee, whatever.

Of course, if there was never a receipt, then.... well, he never paid it did he?

Lesson: never hand over money without knowing what you are buying and getting a receipt!

Huscarl

He and the landlord signed the tenancy agreement and £600 (plus bills payable by the tenant), stated on it, exchanged hands, half cheque (1st month's rent up front), half cash -the landlord never used the word 'bond' for this sum

The landlord never denied that he received £600! Just the word 'bond'. My friend's records show all monies paid and is still owed this 'rent'/'bond' etc- a rose by any other name?

The LL bizarrely and spontaneously paid £182 of this £300 amount he disputes??? A lawyer confidently disagrees with him regarding the meaning of this £300 bond/rent, as do many others in Housing Benefit Assessments whom my friend works with, including me.

How on earth can £600 be two lots of rent in advance?

theartfullodger

Huscarl wrote: »

How on earth can £600 be two lots of rent in advance?

You (or lawyer) needs to read the tenancy. Rent can be paid weekly (yes?? quite common - but you need a rent book..), monthly, 2-months at a time, 12 months at a time... It is entirely up to the LL & T to agree and for that to be reflected in the tenancy.. But that is different from, say, tenancy saying rent paid monthly but LL insisting on 2 months up-front, when the "2nd" month would have to be handled as a legitimate deposit..

e.g. I rent a house to students (mummy & daddy guarantor & presumably paying..) and rent is paid 3 times each year, 4 months at a time. If the prospective tenants don't like it they don't take the house.

But a deposit is a deposit is a deposit (see Housing Act 2004 S213(1)
http://www.legislation.gov.uk/ukpga/2004/34/section/213

213Requirements relating to tenancy deposits E+W

(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.

)
- i.e. lodged in a deposit scheme etc. etc. & Tenant given the prescribed information (or a S21 notice will be invalid).

I think the LL thought he was being "clever" and getting round the DPS legislation (sigh! - there's a few LLs like that..) and he'll be found out in court - if he doesn't have the sense to settle beforehand.

These "schemes" of rent in advance do exist and have been discussed, e.g.
http://www.landlordzone.co.uk/forums/showthread.php?33445
but IMHO they are typical dodgy agent/landlord cheating.. Given that he's cheated on this I wonder what else he cheats on (Safety, tax declaration, HMO regs....??). Perhaps HMRC would like to be prompted??

Cheers!

Artful

Huscarl

Thanks, Artful.

Yes, apparently the lawyer has been through the Ten Agreement with a fine-toothed comb several times with colleagues in order to confirm the case beforehand.

My friend didn't 'agree' with the way the landlord was explaining the 'rents' but signed the Ten Agreement to get the flat, with both signatures to the sum of "£600", and nothing was mentioned at all of any bond scheme. Nor has the LL ever denied receiving £600.

when the "2nd" month would have to be handled as a legitimate deposit.

This is the crux, he is refusing to accept that it is a 'bond' or 'deposit', despite receiving two lots of...."rent" up front! Clearly trying to dodge the Act of April 2007?

The lawyer told my friend that he actually saw the landlord in question at the court building recently, with a few student tenants!! Hmmm? I suspect the man is dodgy and trying to make ££ out of the 50 or so tenants this way?

We are all very confident of winning my friend's case at court soon.

theartfullodger

Best of luck to you Huscarl & your mate: Let us know the result!!

Huscarl

Thanks, Artful - I think my mate is in court around 6/7th Dec, so will let you know the outcome, especially as there doesn't seem to have been a landmark precedent case yet?

Everyone's confident that the landlord is swindling tenants this way. ;-)

Huscarl

Well, the outcome of the court case on Jan 26th was this;-

My colleague won!!!!

The judge ruled that what the landlord had said was "two month's rent up front" (my friend insisted was a "bond") was actually a rent & a bond!
He ordered - according to the law regarding landlords and bond- the dismayed defendant to pay my colleague three times the original full value of the bond, plus the remainder of the original rent that had been only partly paid back!! The ex-landlord was - to his chagrin- denied right to appeal further as he stands a v.v.slim chance of success.

So if anyone knows anyone in a similar situation, tell them to get to small claims, as the law specifically defines what a bond or security deposit is!