Advice needed on tenancy deposit scheme

arte

Hello everyone,


I quickly searched through the threads on this forum and can't find something that answer my doubts.


I'm in a joint tenancy which is ending soon, with my current flatmate surrending and a new one moving in. Despite the switch is happening on the date the original contract would end the estate agent made it work as a change of names on the contract, I don't know if that was the right way to proceed or just a way to steal us those £50 that they can still charge.

Anyway fine with that, the problem is arising now with the deposit. Our original deposit from 2017 should be of course hold on a TDS, it was for 6 weeks as the contract was signed then before all the new rules started. The agency is now asking the new tenant to pay half of those money (6 weeks minus deductions as the leaving tenant made some damages) directly to the surrending tenant and then they say they will move the deposit under my name + new tenant. The new tenant, of course since he is signing a contract now, doesn't want to pay 6 weeks but only the 5 weeks required by the new rules and I agree with him.

Is the agency right in asking us to proceed like this? I asked them why they couldn't refund the original deposit back and we pay a new one, it will make everything easier.



Also, I never received any confirmation, certificate or code from tds or from the agency when we first moved in and when we renewed our contract last year. I went on the tds site and entered all the details of the tenancy and the deposit as it's another way to check your TDS and it says: this deposit is not protected with TDS Custodial.
Should I ask explanation to the estate agent of this?


Any advice will be much appreciated!

G_M

Two 'proper' ways to do this, but LL's/agents sometimes 'fudge it.' This is fine when everything works smoothly but can be a nightmare if things go wrong....

1) The current tenancy is ended (either by end of fixed term, or 'mutual surrender' agreed in writing). Deposit is released and returned. New tenancy is created in new names. New deposit taken and protected according to new rules (eg max 5 weeks). New inventory created. New EPC, gas cert, gov leaflet issued to new tenants.

2) the current tenancy continues but is 'assigned' to the new tenant(s), via a 'Deed of Assignment' (example below). No need for LL to return deposit (or reduce it from 6 weeks to 5), or re-issue documents. The Deed should specify what happens to deposit, usually the incoming tenant pays the outgoing tenant, and thus the incoming tenant takes ownership of the deposit already held by the LL.

https://housing.london.ac.uk/cms/uploads/media/Assignment_-_revised_draft__18_5_12__ver3__2___3_.pdf

If you never received the 'Prescribed Information' for the deposit you paid, you can claim the penalty. See deposit link below

* Deposits: payment, protection and return

arte

Thanks a lot! That was very helpful.


My worry is in fact that doing it the way they want to do can end up in a nightmare and money loss as there are too many parts involved of which none of them seem satisfied with the way the estate agents want to proceed.


Are we in our rights if we ask them to do it as you listed in point 1 instead than in point 2? Or it's for them to decide how to proceed?
They have been making various mistakes already even sending the new contract with wrong starting dates.



The new tenant is of course very worried about paying a large amount of money to someone he doesn't have any relation to and more than he was expected to pay.


Thanks

G_M wrote: »

Two 'proper' ways to do this, but LL's/agents sometimes 'fudge it.' This is fine when everything works smoothly but can be a nightmare if things go wrong....

1) The current tenancy is ended (either by end of fixed term, or 'mutual surrender' agreed in writing). Deposit is released and returned. New tenancy is created in new names. New deposit taken and protected according to new rules (eg max 5 weeks). New inventory created. New EPC, gas cert, gov leaflet issued to new tenants.

2) the current tenancy continues but is 'assigned' to the new tenant(s), via a 'Deed of Assignment' (example below). No need for LL to return deposit (or reduce it from 6 weeks to 5), or re-issue documents. The Deed should specify what happens to deposit, usually the incoming tenant pays the outgoing tenant, and thus the incoming tenant takes ownership of the deposit already held by the LL.

https://housing.london.ac.uk/cms/uploads/media/Assignment_-_revised_draft__18_5_12__ver3__2___3_.pdf

If you never received the 'Prescribed Information' for the deposit you paid, you can claim the penalty. See deposit link below

* Deposits: payment, protection and return

G_M

Since both options require the consent and agreement of all parties (current tenants, new tenants, landlord) you can certainly ask, but if the LL refuses one, or both options, there's nothing you can do.


It is indeed relatively common, especially in larger house shares, for informal arrangements to be done, with the outgoing tenant simply giving his share of the deposit to the incoming one, an no invlvement with the LL.


This can ultimately result in a totally different list of occupants to the names on the tenancy agreement.


So far as deposit is concerned, the LL took this from the original, named, tenants, and hence has no obligation to return it to these unnamed occupants even if they all leave (and attempt to end the tenancy which is not even in their names!)


The occupants would then have to attempt to reclaim their deposit from the long-departed tenants who they originally gave it to.....


Clearly, not being named on the tenancy agreement brings other potential legal issues.


It's a bit like a pyramid investment scheme: so long as it continues and investments continue to be sold to cover the dividends of those higher up the scheme, all is fine and dandy and investors think they are doing well. As soon as sales drop off or dry up, everyone loses their money.


These informal sharer arrangemnts work well as long as the rent continues to be paid, the utilities etc are under control, and the LL is happy. But as soon as something goes wrong..........

arte

It's only 2 of us in the property, with the old tenant leaving and a new one replacing him, so hopefully that would make things easier.

That's why I was more keen in closing the old contract and starting a new one.

One more thing, they are asking the new tenant to accept the original inventory from 2017, but we have builders coming in on Thursday to fix some damages done by the tenant who is leaving and other things have been removed or changed since the original inventory. Is in the right of both me and the new tenant to ask for a revised inventory?

G_M

If using option 1) a new tenancy is created so a new inventory should be drawn up and agreed.

If using option 2) the existing tenancy continues (with the new tenant 'assigned' in place of the old tenant, so the inventory is as per the original one. Like the deposit, the Deed of Assignment should cover this - see clauses 1 & 2 in the sample I provided.

If using an informal arrangement (with no change to the tenancy agreement) then this is one of the potential legal pitfalls.