New Landlord Deposit Rules

Generali

thesaint wrote: »

How would a tenant know that £15 has been passed on?
As I understand it, landlords can't state that they are passing it on, so it will be included by a myriad of other ways.

Hi Saint.

Presumably, tenants are capable of working out the total cost of the tenancy. If a LL wants to pass on any costs be they protecting a deposit or an annual holiday to Barbados they can try but they are unlikely to gain success trying to get a tenant to pay much more than the market price for a property.

thesaint wrote: »

Why shouldn't the tenant pay the price for their money to be protected? It is of no advantage to the landlord to administer this extra legislation.

Possibly this legislation will increase the desirability of renting and thus increase the number of tenants putting upward pressure on rents. By this means tenants might end up paying for the deposit protection scheme.

However, if my LL tries to up my rent by too much I'm off. The last time we looked at 3 & 4 bed houses in a very nice area of Kent we found 2 good ones, each up for £1400 and both empty. We put in offers of £1050 and both were accepted. I don't think that where I am, my LL can up the rent too much regardless of what happens to his costs. A 3 month void on a £300k house is quite expensive!

This can work in the LL's favour too - no need to withold the last month's rent if you are going to get your deposit back if all's well.

Isn't this just an area of consumer law that needs tightening. When a car hire company takes my credit card number I don't expect to be charged a grand for leaving a bag in the boot. Why should my LL get away with it?

PS I thought it was illegal to sell an unroadworthy car. The AA seems to think it's illegal to sell a 'cut and shut' due to registration. Probably no bad thing.

thesaint

I still don't understand how you will define that the landlord has built in £15 to his pricing. Market forces will surely include this fee, whether it be this year or next.

A bad tenant will simply not pay two months rent, and tell the landlord that they won't contest the retention of the deposit. So no benefit to the landlord there.

I agree that it is an area that needs tightening, but tenants will end up paying for it, as I said it's their money.

Re: The car, it's not illegal to weld two, three or even four cars together, it only becomes illegal if the 'car' you are putting on the road has been written off by the DVLA and deemed spares only. I do understand where you are coming from though(I was an M.O.T inspector).

PS any discering landlord wouldn't be caught dead in Barbados, Brazil is the place to be.

Generali

thesaint wrote: »

I still don't understand how you will define that the landlord has built in £15 to his pricing. Market forces will surely include this fee, whether it be this year or next.

My point is that it's neither for me nor you to decide whether or not any cost has been included in a hoped for rent. As a tenant, I seek to pay a rent I wish to pay, a LL seeks to charge a rent (s)he wishes to charge. In my current home, I pay £1050pm, the asking price was £1400pm. We came to an agreement. I don't care what the LL's costs are.

A previous LL sought to up my rent by £20 pw. I moved on.

thesaint wrote: »

A bad tenant will simply not pay two months rent, and tell the landlord that they won't contest the retention of the deposit. So no benefit to the landlord there.

Unarguable point. A reasonable tenant that has been stung in the past might be happier to rely on a deposit held by impartial third party though. This system has been going on in Aus for many years and seems to work well.

thesaint wrote: »

I agree that it is an area that needs tightening, but tenants will end up paying for it, as I said it's their money.

I refer the honourable gentleman to my answer about total prices the market will support.

thesaint wrote: »

Re: The car, it's not illegal to weld two, three or even four cars together, it only becomes illegal if the 'car' you are putting on the road has been written off by the DVLA and deemed spares only. I do understand where you are coming from though(I was an M.O.T inspector).

I defer to your greater knowledge. I am but a humble banker. Perhaps you could lend (sell?) me your experience next time I buy a car?

thesaint wrote: »

PS any discering landlord wouldn't be caught dead in Barbados, Brazil is the place to be.

Shocking crime problems in Brazil. I like Barbados - you can talk to the taxi drivers about the cricket and the Generalissimos don't get washed away in the surf if you pick the western beaches.

thesaint

I don't disagree that a tenant who's been stung before would prefer it to be held by an impartial 3rd party, it's just that I don't see why I (landlord) should administer and pay for it.

The market I am in can take a one off £15-£20 fee so not too bothered.

Although not Barbados, I was speaking to the wife of possibly the best batsman ever to grace this planet last week who lives on another caribbean island. She told me that she had an intruder in her house the previous night wielding a knife, luckily no harm done. Crime is getting bad everywhere.

When in Brazil the taxi-drivers know what i'm there for, and it 'Just aint cricket'.

Generali

thesaint wrote: »

The market I am in can take a one off £15-£20 fee so not too bothered.

Fair enough although it makes me wonder why you don't charge the fee already. Your business, your call.

thesaint wrote: »

Although not Barbados, I was speaking to the wife of possibly the best batsman ever to grace this planet last week who lives on another caribbean island. She told me that she had an intruder in her house the previous night wielding a knife, luckily no harm done. Crime is getting bad everywhere.

Gary Sobers? Viv Richards? Surely not Devon 'You guys are f***ing dead'' Malcolm?

The Carribean is made up of many countries. I went to Trinidad - crime ridden hell hole. Barbados: island paradise (kinda).

thesaint wrote: »

When in Brazil the taxi-drivers know what i'm there for, and it 'Just aint cricket'.

You love it! Oh yeah!
(Apologies to 10CC).

franklee

thesaint wrote: »

I still don't understand how you will define that the landlord has built in £15 to his pricing. Market forces will surely include this fee, whether it be this year or next.

Well I'll happily pay that and still be ahead as the interest on my deposit is £50 a year so I'd still be ahead with the deposit protection scheme that returns the deposit WITH interest to the tenant on the tenant's share.

Not that I see where this £15 fee comes from as the deposit protection scheme is free so anyone concerned about the cost can just chose that one!

There are other issues to worry a landlord though, two for starters:

1. These schemes will provide the government with a handy list of all residential landlords. Useful for cross checking rental income has been declared for tax, etc. etc. Once the government has a list of sitting ducks I suspect they'll find a use for it.

2. As Marveen Smith said on money box the other day, the routine issuing of a Section 21 notice requiring possession on day one of the tenancy (the so called Sword of Damocles) will be curtailed as landlord's can't issue a section 21 until the deposit is in the scheme. This makes it more likely the section 21 will arrive well after day one when there's much less chance of the tenant overlooking it.

I wonder what other side effects these deposit rules will have?

mystic_trev

http://money.independent.co.uk/property/homes/article2396841.ece

thesaint

franklee wrote: »

Well I'll happily pay that and still be ahead as the interest on my deposit is £50 a year so I'd still be ahead with the deposit protection scheme that returns the deposit WITH interest to the tenant on the tenant's share.
The interest returned is below the B.O.E base rate. So as a landlord, of no benefit to the current rules.

Not that I see where this £15 fee comes from as the deposit protection scheme is free so anyone concerned about the cost can just chose that one!
Free to join, but not free to administer. Why should I as a landlord incur any expense to protect a tenants money.
I would be all for it if the tenant had to lodge it, and send me proof within 14 days. If they didn't, I should have 3 times the deposit awarded to me, or immediate termination of the tenancy, no possession notices, court cases etc. I would happily take all this benefit at no cost to myself.

There are other issues to worry a landlord though, two for starters:

1. These schemes will provide the government with a handy list of all residential landlords. Useful for cross checking rental income has been declared for tax, etc. etc. Once the government has a list of sitting ducks I suspect they'll find a use for it.

2. As Marveen Smith said on money box the other day, the routine issuing of a Section 21 notice requiring possession on day one of the tenancy (the so called Sword of Damocles) will be curtailed as landlord's can't issue a section 21 until the deposit is in the scheme. This makes it more likely the section 21 will arrive well after day one when there's much less chance of the tenant overlooking it.

I wonder what other side effects these deposit rules will have?

A lot of tenants seem to think that the deposit is in fact the last months rent.
This new scheme does nothing to alleviate this, it moves it to not paying the last two months rent surely? I think this will be more prevalent if the deposit is not accessible to the landlord and the tenant knows that it may take days/weeks after checkout to receive it. If it is disputed, it will take longer than the current system.

thesaint

Generali wrote: »

Fair enough although it makes me wonder why you don't charge the fee already. Your business, your call.
Never felt the need to, I manage 5 flats for a relative, I get paid a fixed fee per month, if extra work is required it is charged on top of this. I won't do the extra work for free, my relative doesn't see why he should pay for it, so guess who will...

I also have a couple of properties of my own, I do more than required to keep them happy, why should I do even more to protect their money?

I have never had any tenant make a complaint about the retention of any deposit money in the 6 years I have been doing it.
If I had a complaint, I could see why I should be made to join the scheme.


Gary Sobers? Viv Richards? Surely not Devon 'You guys are f***ing dead'' Malcolm?
Yep, one of them
The Carribean is made up of many countries. I went to Trinidad - crime ridden hell hole.The Trinidadian tourist board may use this in their next campaign Barbados: island paradise (kinda).



You love it! Oh yeah!
(Apologies to 10CC).

It will all come out in the wash, so watch this space.

Guy_Montag

I've left my deposit in lieu of rent in the past, because I didn't think I'd see my deposit again - the place was a shithole when I arrived & no better or worse when I left, the LA was very dodgy too. But there's a big difference between leaving one month's rent equivalent for one month's rent, to leaving one months rent equivalent for two months - & I really don't understand how you make that leap. I don't see the logic you're using.

As for the disputed deposit, as I understand it any money undisputed is paid to the tenant after 10 days or so. Then it goes to arbitration over the remaining sum. This seems a far more sensible system than the LL holding all the money even if there is only a small amount disputed.

What's the administration charge associated with the deposit protection scheme? Or do you mean 5 minutes of your time to register online & do a bank transfer?

Finally I agree with the point Generalli was making, you can add an extra charge to the rent to "compensate" yourself for this, but if your competitors don't you'll end up with a lot of voids.