Serving S21,Tenancy Deposit rules and Sword of Damocles

scrummy_mummy_2

Following on from a thread a few weeks ago where it was raised that the requirements of the new Tenancy Deposit Scheme(s) must be complied with before a S21 can be served...I have the promised clarification.
Please do no assume I do serve a S21 at the time I sign a tenancy agreement...I just promised to clarify the position on the 'Sword of Damocles' approach for some of the regular viewers!
Under the new legislation......
If you/the agent wants to serve a S21 Notice on the same day that the tenancy agreement is signed...the deposit MUST be registered before this can happen and the tenant must have been given the required prescribed information about the relevant scheme that the LL/agent is party to. (That's all the explnatory paperwork about which scheme you are party to/intend to use/resolution process/details of how the deposit is held/handled etc.)
So....if you do operate the Sword of Damocles........
This means, you/the agent now has 2 options...

1. Register the deposit with the appropriate scheme JUST before (the day or the morning or the hour or minute BEFORE) the agreement is signed. Give the tenant all of the information relating to the relevant scheme BEFORE he signs the agreement (make sure you time and date all docs so they can be seen to have been signed in order correctly! if you do it the same day!)
OR......
2. Sign the tenancy agreement, making sure you give the prescribed information of the relevant scheme at the time....go back to the office or do it on the phone there and then, to register the deposit and either serve the S21 then (if registered by phone!) or return the same day to serve the S21.

Obviously for those of you seething at this method of operation, the new regulations won't eradicate this proceedure, it might just make it a little bit more tricky....perhaps not, wouldn't cause me too many problems if I was going to do it!

I now throw this topic to the lions for discussion!!

BobProperty

scrummy_mummy wrote: »

Following on from a thread a few weeks ago where it was raised that the requirements of the new Tenancy Deposit Scheme(s) must be complied with before a S21 can be served...I have the promised clarification.

I haven't read the details of the law on this but the logic works like this IMHO:
To have a valid AST the deposit now has to be held in a Tenancy Deposit Scheme.
You can not issue a S21 notice until the tenancy has commenced.
Therefore, until the tenant has been notified of the Tenancy Deposit details in the prescribed manner, you can not issue a S21 notice.

Dodgy tenants will also be able to claim non-receipt of the Tenancy Deposit details and the S21 unless landlords are careful.

JohnInDebt

This is interesting as I recently signed a tenancy agreement where a S.21 was also served, the S.21 was served before any information about the deopit scheme was given (still awaiting) and the S.21 was also served before the tenancy started (a week prior).

scrummy_mummy_2

JohnInDebt wrote: »

This is interesting as I recently signed a tenancy agreement where a S.21 was also served, the S.21 was served before any information about the deopit scheme was given (still awaiting) and the S.21 was also served before the tenancy started (a week prior).

Then it is entirely and without question invalid!

moneysavinmonkey

can someone summarise the rules regarding the new tenancy deposit scheme - or point me in the right direction?

Will be moving between renting properties next month so my deposit will fall under the new rules for the first time - where can i find out more information about this?

Guy_Montag

moneysavinmonkey wrote: »

can someone summarise the rules regarding the new tenancy deposit scheme - or point me in the right direction?

Will be moving between renting properties next month so my deposit will fall under the new rules for the first time - where can i find out more information about this?

Check here

Guy_Montag

JohnInDebt wrote: »

This is interesting as I recently signed a tenancy agreement where a S.21 was also served, the S.21 was served before any information about the deopit scheme was given (still awaiting) and the S.21 was also served before the tenancy started (a week prior).

heh heh heh, was this an agent or a LL? Really they shouldn't be involved in the property business at all.

Is it dated? Not that it matters. When did you start your recent tenancy? They have 15 days to inform you of the scheme, so you can start pushing them or you can wait & at the end try to sue them.

JohnInDebt

Guy_Montag wrote: »

heh heh heh, was this an agent or a LL? Really they shouldn't be involved in the property business at all.

Is it dated? Not that it matters. When did you start your recent tenancy? They have 15 days to inform you of the scheme, so you can start pushing them or you can wait & at the end try to sue them.

It was an agent who were operating as 'finders' only, they have nothing to do with the maintenance etc..

It is dated and the tenancy started on the 1st October, with the deposit being paid on 21st September. Does the 15 days start from when I paid it or when the tenancy started?

clutton_2

"" Dodgy tenants will also be able to claim non-receipt of the Tenancy Deposit details and the S21 unless landlords are careful.""

a really stupid tenant might claim this but they would be shooting themselves in the foot if they did - if they claim not to have received details in the post from the Deposit Scheme administrators, how then can they then reclaim their deposit if they are not living at the Deposit Address - and how can they be living at the address if they did not receive post ?

A good landlord will include their deposit scheme details in the AST along with the "prescribed" information. I now hand my tenants 6 pages of T&Cs from the free DPS scheme based in Bristol. And yes the landlord does get the interest (i got 18p recently, less tax of 04p so i actually received 14p).

Once the deposit is paid to the landlord s/he has 14 days to lodge it with the Scheme. The Scheme then write to both landlord and tenant (to acknowledge receipt) giving them separate ID numbers and the same Deposit ID number.

If landlords are using an insurance backed scheme, then they do not have the lodge the money, but, the Scheme will still write to each party to notify them of the deposit protection.

If a landlord has made a deduction and it is disputed by the tenant, the landlord can refuse to go through the Scheme Dispute Resolution Process, and can force the tenant to take him to court to reclaim deposit deductions - so we are then back to square one before the 2004 Act came into force.

I think there is a great deal of speculation talked about on this site with regard to Section 21 - a Section 21 can be served at any time after the AST is legally binding - ie after signature of the AST.

The timing of the deposit being lodged with the Scheme has no bearing on the validity of the AST. Clearly, if deposits are paid by cheque, time is needed for banks to do their business - so 14 days is a practical amount of time.

BUT the signature on the AST acts as a receipt for the deposit money - not the lodging into the Scheme.

coal9011

I am in total agreement with the new Tenancy Deposit Scheme(s)

But Landlords or Letting Agents who issue Section 21 Notice at the start of a tenancy "make my blood boil!" :mad:

Those agents who do it are "lazy!" and landlords who do it are "crazy!" as they have property that they want occupied, but they are effectively giving the tenant "notice to leave" on the first day of occupation!

If one or the other asked me to sign a sect. 21 at the start of the tenancy I would tell them to stick their tenancy agreement "where the sun does not shine" and go and find another property to rent. Such LL's deserve to have their properties standing empty earning them nothing!!!!!!!!!!

" Sword of Damocles" .................................. "my ar#e!"

sooz

clutton wrote: »

I think there is a great deal of speculation talked about on this site with regard to Section 21 - a Section 21 can be served at any time after the AST is legally binding - ie after signature of the AST.

However, since 6th April 07, the Section 21 is invalid if served before the deposit has been lodged or registered with either scheme.