Serving a Section 21? Unprotected deposit taken before 2007

SerialRenter

laidbackgjr wrote: »

Would the change of landlord upon inheriting the house not be deemed a new tenancy and the deposit would have needed protecting at this point?

No, when a new landlord takes over from the old, they effectively step into their shoes, taking on all of the responsibilities and liabilities (historic liabilities too i believe) of the old landlord. Nothing changes from he point of view of the tenant, except receiving an updated address for the serving of notices an a new bank account to pay the rent into.

Edit: Pixie beat me to it!

G_M

Brighty wrote: »

Rather worryingly, google led me here
http://www.landlordlawblog.co.uk/2013/06/17/new-case-on-tenancy-deposits-received-before-april/
and here
http://www.landlordlawblog.co.uk/2014/12/18/charalambou-v-ng-another-worrying-tenancy-deposit-case-on-old-deposits/

Brighty

The second of these two links is new to me and changes the commonly held view.

It makes clear via the Charalambou v. Ng Court of Appeal ruling (here.) that NO S21 Notice will be valid if a deposit is un-protected, irrespective of the date the tenancy started or the deposit was taken.

You should therefore return the deposit before issuing the S21.

The good news is that you are not liable for the 3 times penalty though.

Brighty

So, is it safe to assume then that a S21 is not valid unless I return their deposit or agree a deduction in deposit with the tenant?

Tenant is currently £1250 behind on the £800 a month rent, though they are currently paying the £800 each month (even since I told them in person we want them to go, which was worrying me). This is due to one of them losing their job last year, I gave them some leeway at the time and they haven't fully caught up.

Should I write to them with a breakdown of outstanding rent and ask for them to confirm in writing that their deposit be used to pay this down, effectively returning it?


I could then issue a valid S21 no?


I don't really want to hand them £800 cash when they currently owe me £1250 and could potentially stop paying the rent anytime they like.

Crazy thing in all this is, I have no reason to believe they won't go when we need them to, or sooner. They just asked that I confirm it in writing and do them a reference. I just want to cover my back legally just in case they kick up a fuss come July


Thanks


Brighty

G_M

My reading of the Charalambou v. Ng case is that you could either

* refund the the deposit in full, then issue a 21
* agree deductions (in writing) with the tenants and refund the balance (in your case a negative sum, so £0), then issue a 21
* register the deposit, then issue a 21

However, as I said, that case is new to me so I'm only now reading/interpreting it.

Brighty

Thanks GM

Think what i'll do then is write to them, confirming I want then to leave by end July (they requested written confirmation), include references for them as they requested, to keep them sweet. In the letter i'll say something along the lines of


'based on the condition of the property on my visit last week, I am happy to return your full deposit of £800, however please see breakdown below which shows a current rental shortfall of £1250.
Provided you agree to continue to pay the £800 monthly rent from now until the end of the tenancy, then I am happy to use your deposit to pay down the outstanding overdue rent, I will write off the remaining £450. (I don't hold out much hope of getting the £1250 back before they leave, so was only ever going to get their £800 deposit I should think)
Please sign below and return in the enclosed SAE to confirm that you agree to the deposit being deemed repayed in exchange for paying off outstanding rent"


What you think?


Brighty

G_M

Looks like a good compromise. Once you have their wrtten acceptance of the terms of the deposit refund, serve a S21 just to be sure.

jjlandlord

G_M wrote: »

changes the commonly held view.

One should not rely on the 'commonly held view' as it is often based on nothing...

When the Localism Act came into effect, landlords should have protected all deposits.
The wording was sufficiently clear to raise a massive red flag... as confirmed by Charalambou.

G_M wrote: »

The good news is that you are not liable for the 3 times penalty though.

The court did not decide on this issue in the Charalambou case, so the current situation is that this is unclear but it does not look good for landlords.

Brighty

Thanks all

Sending them the letter today, hopefully that does the trick.

Another question re: S21 notices, I was under the impression that as the original AST started on 1st of the month, that the S21 needed to state end date as last day of the month, but I'm seeing some conflicting views on this online when in a periodic tenancy.

I've seen references to 2 calendar months notice. Is that the case? If so, does that mean I can put whatever date in July I like on it, so long as I send the S21 at least 2 months before (will probably be 3.5 months before if I send it by the end of this month).

Reason I'm asking is, ideally we'd like the property back mid July rather than end of July, so our 4yr old autistic son can visit his first/new school a couple of times before they break up for summer hols and he starts in Sept.


Thanks


Brighty

jjlandlord

In principle 2 calendar months should do even if the tenancy is periodic.

Note that nothing guarantees that your tenant will leave by the notice's expiry date, and if that happens it might take a few more months to get him out.

If you really are unsure of the whole procedure, you might want to get someone to draft the notice for you and ensure that all is fine.
There are quite a few such services out there, for example lettingmate.uk (other services available).

Pixie5740

You do realise that the Section 21 won't actually end the tenancy as only the tenant or a court can do that. All a Section 21 does is give the tenant notice that you are starting the process to regain possession of the property.

My spider senses are telling me that your tenants might be going for social housing. Glowing references plus formal notice that you want the property back....

If they are going for social housing or are unable to find alternative private rental accommodation you need to be prepared that it could take months beyond July to get them out.