How can landlords end an assured shorthold tenancy

Recently, there’s been some discussion in the lettings community about serving notice to end a tenancy, resulting in a range of responses with no clear view. To help landlords understand this complex issue, we’ve invited Tessa Shepperson from Landlord Law to explain how landlords can end tenancies. 

Please note: Comments regarding amendments arising from the Deregulation Act 2015 apply to tenancies in England only, not Wales.

How can landlords end an assured shorthold tenancy?

There’s generally a lot of confusion about the service of notices and whether they actually end a tenancy in the eyes of the law.

Before we explore this further, let’s take a look at the original form of notice that we used to use – a Notice to Quit.

Notices to Quit (NTQ)

An ‘NTQ’ is a special type of common law notice that will completely end a tenancy after the notice period. It’s not the same as, say, a section 21 (s21) notice, even though an s21 is a notice asking your tenant to leave!

People sometimes make the mistake of using the term NTQ to end their tenancies. Although NTQs are still used for common law and unregulated tenancies (such as company or resident-landlord lets), they’re invalid for the majority of residential tenancies.

Section 5 (s5) of the Housing Act 1988, which regulates assured tenancies (ATs) and assured shorthold tenancies (ASTs), states that landlords’ NTQs are of no effect, as:

> They can’t be used to end a fixed term early; and
> They can’t be used for ATs or ASTs!

If a landlord is able to use a NTQ (for example if they don’t have an assured or an assured shorthold tenancy), they’ll need to act quickly to issue proceedings to evict their tenant, as accepting another month’s rent from the tenant can resurrect the tenancy - meaning that they’ll have to serve another NTQ to end it again!

However, it’s worth bearing in mind that AT and AST tenants can still serve an NTQ - for example to end a periodic tenancy.

So, if an NTQ is useless for ending the vast majority of tenancies, what should landlords use instead?

Ending a tenancy under the Housing Act 1988 

The Housing Act 1988 governs most tenancies created since 15 January 1989. It put into place new rules about ending tenancies, set out in s5 of the act, and says that tenancies can only be ended in the following ways:

1. By a landlord getting a possession order from the Court AND the order being ‘executed’ – e.g. by a County Court bailiff physically removing the tenants - s5(1)(a); or

2. Where the tenancy agreement allows the landlord to end the tenancy - normally by exercising a ‘break clause’ - s5(1)(c)  (although it should be noted that if the tenant stays in occupation, a ‘periodic’ tenancy will then come into being, under section 5(2), meaning that the tenant will still have a tenancy.); or

3. By ‘a surrender or other action on the part of the tenant’ - s5(2)(b). This will normally be:

> Exercising a break clause;
> Moving out at the end of the fixed term;
> Serving a tenant’s NTQ during a periodic tenancy; or
> Surrender (which normally needs to be agreed with the landlord).

The Housing Act 1988 notices

There are two notices to be aware of here:

> Section 8 (s8) - landlords can use this when they want to base their claim on one of the grounds for possession set out in Schedule 2 of the Act.  The most common ground is ground 8, the mandatory rent arrears ground; and
> Section 21 – this is for when landlords want to use the ‘no fault’ ground for possession.

It’s clear from the legislation that serving these notices doesn’t actually end the tenancy in the same way as an NTQ.  They do, however, entitle the landlord to obtain an order for possession if they go to court.

The tenant can continue to live in the property and will be liable for the rent.  If the landlord doesn’t issue proceedings, the tenancy will continue indefinitely - unless the tenant leaves of their own free will.


What happens if the tenant leaves early?  

Does this ‘end’ the tenancy? This is an important point as the tenant is only liable for the rent while the tenancy exists.  

The legislation does not actually say anything on this point, and currently there is no guidance available from the courts.  Therefore, the requirement for the tenant to serve notice if they wish to end the tenancy remains. Whilst section 40 of the Deregulation Act 2015 adds a new section 21C to the 1988 act providing for landlords to refund any rent paid in advance where:

“as a result of the service of a notice under section 21, the tenancy is brought to an end before the end of a period of the tenancy”

This would appear to be limited to any overpayment received as a result of the landlord no longer being required to serve their notice to coincide with the rental due date, which may result in an overpayment of rent.

So far as s8 notices are concerned, information is limited to a point at the end of the prescribed form, which says:

“Your landlord cannot make you leave your home without an order for possession issued by a court. By issuing this notice, your landlord is informing you that he intends to seek such an order. If you are willing to give up possession without a court order, you should tell the person who signed this notice as soon as possible and say when you are prepared to leave.”

The important point to understand here, is that the tenant needs to inform the landlord if they wish to end the tenancy after the service of a notice. I do not think that the tenant can unilaterally end the tenancy by moving out after the service of a notice without doing this first.

To help illustrate the point, here are a couple of scenarios. Imagine a landlord has served an s8 notice on 23 May:

Scenario 1
The tenant just ups and leaves on 4 June, taking all his possessions and putting the keys through the letterbox. The landlord doesn’t find out until he visits the property on 23 June.

Scenario 2
The tenant tells the landlord that he will be moving out on 4 June. He moves all his property out on that day and gives the keys back to the landlord.

> In the first scenario, the tenant is liable for the rent up until the 23 June because they didn’t inform the landlord they’d be moving out on 4 June.
> In the second scenario, the tenancy ends on 4 June because the tenant let the landlord know. Therefore the tenant will not be liable for any further rent after that date.

In many cases where tenants leave in this way, the tenants liability for rent is academic as there won’t be any money available, other than by claiming against the deposit. However, it is always a good idea for tenants to minimise their liability to their landlords. 

To put it simply, tenants need to keep their landlords informed if they’re moving out and landlords need to keep a close eye on their properties.

Tessa Shepperson is a specialist landlord & tenant lawyer.  Find more of her writing on the Landlord Law Blog.

 

The ‘new’ model tenancy agreement

In February the Department for Communities and Local Government updated their ‘Model agreement for a shorthold tenancy’. The agreement is designed to strike a fair balance between the needs of the tenant and the landlord when entering a new tenancy. 

With property prices rising ever higher, getting on the housing ladder is becoming more difficult all the time. As a result, demand for rental properties with longer tenancies is expected to be higher than ever. 

A longer tenancy does have its advantages. A tenant can plan for the future, safe in the knowledge that they won’t be looking for a new place to live in three months. And landlords will have a steady rental income without the hassle of always looking for new tenants (and the hefty fees that often go with it). 

The agreement has a really useful step-by-step process that a landlord and tenant can go through before entering a new tenancy. If you’d like to know more, download the document here

SAFEagent Awareness Week – we’re fully behind it

From the 6-10 June, letting agents and organisations from across the UK will come together in support of SAFEagent Awareness Week. SAFEagent was set up “by the industry, for the industry” to protect landlords’ and tenants’ money. As a company that is committed to protecting tenants’ deposits, we’re fully behind it.

Throughout the week, SAFEagent will highlight the importance of choosing a letting agent that is part of a Client Money Protection (CMP) Scheme. In an industry that’s estimated to be worth £2.7 billion, it’s vital that our customers’ deposits are safe. There are still too many cases where tenants are losing money to rogue agents. 

John Midgley, Chair of the SAFEagent Steering Group, says: 

“Choosing a letting agent without CMP in place is a massive risk for both landlords and tenants. Who can afford to lose thousands of pounds? We might finally be getting closer to mandatory CMP but we aren’t there yet. It is so important that consumers understand that they need to choose their agent wisely by asking if they are part of a CMP scheme before entering into a contract with them.”

While it’s not mandatory to protect client money in a CMP, it is now firmly on the Government’s agenda. It’s definitely a step in the right direction and one that is supported by many organisations in the housing industry, including us. 

We’d like to encourage all letting agents to become members of SAFEagent. The blue and black SAFEagent ‘mark’ gives tenants and landlords the peace of mind that their money is protected.

New smoke and carbon monoxide alarm regulations for landlords

On 1 October 2015, a number of new regulations for landlords were introduced, as a result of the Deregulation Act 2015. This included a requirement for landlords to have smoke alarms installed in their properties. Landlords are also legally obliged to provide carbon monoxide alarms in any premises which contain a solid fuel burning appliance – this applies to any kind of wood burning stove or an open coal fire. It will also extend to equipment such as a solid fuel Aga in the kitchen.

We think tenant safety should be the top priority for landlords, so we asked the London Fire Brigade if they would share their advice following the introduction of the new regulations. Mark Hazelton, Group Manager for Community Safety Development at London Fire Brigade, discusses the recent changes in the law and what this now means for landlords.

Did you know that…

  • 40 people per year are killed by carbon monoxide
  • You are four times more likely to die in a fire at home without a smoke alarm
  • You are seven times more likely to have a fire if you’re living in rented or shared accommodation

Due to a recent change in the law, it is now the landlord’s responsibility to fit smoke alarms at the beginning of each tenancy. It is also their responsibility to test them regularly to make sure they’re working. If these measures aren’t put in place, not only could you be risking the lives of your tenants, you could also face a possible £5,000 fine.

It is vitally important to fit at least one working smoke alarm on each level of a house or home. As the Government statistic above shows, those in rented accommodation are much more likely to have a fire. Many fires happen at night when people are sleeping and smoke alarms are the best early warning, buying precious seconds for people to escape. Only recently, a smoke alarm saved four people from a house fire in Lewisham.

Following the change in the law on October 1st 2015, the Government is giving away free smoke alarms via Fire and Rescue services across the country.
 
In London, fire chiefs are offering free alarms to landlords in areas that have been identified as being more at risk of having fires. You can fill out the following application form to see whether you are eligible for one: http://www.london-fire.gov.uk/freesmokealarms.asp

If you’re a landlord in another part of the UK, please contact your local fire and rescue service to ask about whether you are able to get a free alarm. The scheme also provides carbon monoxide alarms to landlords of properties that contain a solid fuel burner, like a wood stove. Smoke and carbon monoxide alarms can also be bought relatively cheaply at most hardware shops.
 
It really is easy to fit them in your properties and necessary if you want to stay on the right side of the law.

Students, 12 tips to safeguard your deposit and have a happy tenancy

Students, it’s that time again – your new academic year. We hope by now you’ve sorted your accommodation and are looking forward to moving in, if you haven’t done so already.

Here at DPS HQ we’ve been recalling our student days, remembering how we made it through the long hours of study with the help of the great friends we made and some epic house parties…but we also haven’t forgotten the weird unidentifiable objects in the fridge, the post-party disaster zones, and, of course, always being skint!

There’s no good time to lose money but it’s worse when you have hardly any in the first place, which is why we were sad when our research into deposit repayments suggested students are twice as likely to lose part/all of their deposit than other renters.

Common sense should tell you that you’ll need to keep your house clean and in good order to get your money back, but there’s actually a lot more to keeping your deposit than you might think.

To help you, we’ve put together these 12 tips:


1.    First and foremost, make sure your landlord protects your deposit with an authorised deposit protection scheme.

2.    When you move in, agree an inventory with your housemates and return it to your landlord. Take date stamped photographs of any damage or problems that you record on the inventory as evidence.

3.    If you don’t know your landlord, check their name against your university or student union’s list of approved landlords.

4.    Remember, every tenancy agreement can be different: make sure you read yours and understand your obligations.

5.    Record all communication with your landlord in writing, particularly any agreements you make. Follow up phone calls with an email confirming what was agreed. 

6.    Keep copies of any documents, receipts and emails relating to your tenancy.

7.    Report any defects with the property promptly and in writing, including the cause of the problem where you can.

8.    Take photos of problems that arise in the property, and make sure they are date stamped.

9.    Remember your obligations as tenants are what are known legally as “joint and several”: if an individual tenant does not accept personal responsibility when something goes wrong, such as a breakage, then it becomes the joint responsibility of all the tenants.

10.    Keep in mind that with most tenancy agreements you’ll be liable for damage to communal areas as well as your own room.

11.    Remember in most cases you’ll be liable right until the end of the tenancy, even if you move out before your housemates. You could remain jointly responsible for any cleaning or repairs to the property, even if the damage happened after you left.

12.    Attend the checkout inspection at the end of your tenancy and take your own photographs if necessary.

It may seem like a long time before you’ll need to think about moving out, but now’s the right time to be thinking about your deposit, so you don’t lose out. Now you’re in the know, why not do a good deed and share these tips with your housemates and friends? 

And don’t forget to watch our short video to see some amusing ways you could lose your deposit.

Beware of fraudsters targeting tenants

Con artists and fraudsters are constantly changing their tactics. This is why we continually monitor the use of our service, as from time to time tenants can sadly find themselves a target.

We’ve identified a new scam which is targeting tenants using websites such as spareroom.com.

Here’s how it works:

  • The fraudster advertises a fake property or room – often at quite a cheap rental rate to attract interest
  • To secure the rental, prospective tenants are told to make a deposit payment to The DPS using a set of bank account details that actually belong to the fraudster

How to spot the scam

First and foremost, we will never ask you to make a payment directly to us.

You should only ever make a deposit payment to the letting agency or landlord, and we advise that wherever possible you inspect the property/room in person before doing so. Always obtain a receipt.

In many scams, communication is conducted via email. Tell-tale signs will be bad spelling or grammar and overly informal language (e.g. “finish the deal”). They may also try to make you feel under pressure to do what they want, and will sometimes ask you to confirm information that they should already have.

Protecting your money

Fortunately fraudulent landlords and letting agents are a minority in our industry. The majority are genuine and treat their tenants fairly. For further peace of mind, it’s also worth checking if your landlord or agent is a member of an industry body such as the Residential Landlords Association (RLA), the National Landlords Scheme (NLA). the Association of Residential Letting Agents (ARLA), or the National Approved Letting Scheme (NALS). Membership of these schemes indicates that a letting agent/landlord is genuine and committed to improving standards in the private rented sector. If you’re dealing with a letting agent, you can also check if they operate a client money protection scheme. The Safe Agent mark is an industry accreditation that shows an agent uses client money protection, which can also give you additional reassurance about the organization or person you’re dealing with.

Staying safe online

Here’s a few other tips:

  • Keep your passwords secret
  • Where possible, use passwords that include numbers, capital letters, lower case letters and symbols to make them more secure
  • Don’t write passwords down or save them in your phone
  • Take a good look at emails before clicking on any link – if it looks fake, or the offer sounds too good to be true, then think twice

You can also watch our video on ‘phishing’ to help you learn more about staying safe from fraudsters using email as a way to gain your personal information.

If you’re still not sure if an email has come from us, please forward it to us here and we’ll let you know if it’s genuine.

Merry Christmas from The DPS!

It’s impossible to miss the tinsel, wreaths and Christmas jumpers that have sprung up all over the country in the last couple of weeks which can only mean one thing – it’s nearly time for us all to down tools, enjoy lots of food and the joys of Christmas TV. As you know however, you can never fully switch off from your responsibilities as a landlord, whether that’s making sure your property is kept in good condition over the festive period, completing deposit disputes or even taking on new tenants.

There are a couple of things you can do to make sure your properties are in order, ensuring the safety of your tenants and hopefully a stress-free Christmas for you.

Are your tenants leaving the property over Christmas?

Our adjudication team receives a lot of claims following severe winter weather. The majority are usually the result of burst or frozen pipes at student houses where tenants had left the property to spend Christmas with their families.

In the worst cases seen by our adjudicators over the years burst pipes have resulted in damage to carpets and flooring, kitchen appliances needing replacing and claims for lost rent whilst damage is repaired. Some landlords have faced repair bills of several thousand pounds.

To avoid this stress and expense, contact your tenants to see if they’re going away for the festive season, to ensure that the proper measures are taken to avoid this kind of damage.

Be aware of evidence submission deadlines

If you’ve currently got a deposit in dispute then don’t forget to stick to your evidence submission deadlines. The DPS is not extending any deadlines but is making allowances for bank holidays so if you’re concerned about a deadline then get in touch so we can see what we can do for you.

Our Christmas opening hours

If you’re taking on new tenants over Christmas or the New Year you can submit deposits at any time online. If you need assistance our contact centre opening hours are:

Monday 24th – 8:30am – 4:00pm

Tuesday 25th – CLOSED 

Wednesday 26th – CLOSED 

Thursday 27th – 8:30am – 5:30pm

Friday 28th – 8:30am – 5:30pm

Monday 31st – 8:30am – 4:00pm

Tuesday 1st – CLOSED

You can also get in touch via online form or why not ask Emma, our online customer service agent.

Finally, a very merry Christmas to you from everyone at The DPS!

We’re here to help

Lately we’ve had quite a few people ask us questions on our twitter page @The_DPS. While we will always try to help where we can, messages on twitter can be seen by everyone so we can’t answer questions about a particular deposit for reasons of customer confidentiality. If you have a question about your deposit, there are plenty of ways to get in touch. You can fill in our online form, call us on 0844 4727 000, or you may find the answer in our FAQs for tenants and landlords, or by asking our virtual agent Emma.

 

Logging in to The DPS

We have also had some tenants contact us asking questions about the repayment process, so here’s some top tips to help:

1)    If you log in with your Deposit ID and surname, you will be able to view the details of the deposit, but you will not be able to action the repayment process. This is for security reasons, to ensure changes to the deposit can only be made by those who are authorised.

To log in and complete the repayment process the lead tenant or sole tenant needs to log in with the Deposit ID AND Repayment ID. 

2)    If you do not know your Repayment ID, you can request a new one by filling in our online form or by texting REPAY followed by the Deposit ID and deposit amount to 07537404808.

3)    If you do not know your Deposit ID, you can find it on your deposit submission confirmation, or your landlord or agent should be able to provide it. If not, call us on 0844 4727 000.

4)    Remember, keep your Repayment ID safe – it’s unique to you like a PIN number and shouldn’t be shared with your landlord or agent (they will have their own unique ID number). The Repayment ID grants authorisation to repay the deposit, so make sure you keep it confidential.

Changes to tenancy deposit protection from 6th April 2012

The Localism Act achieved Royal Assent in December and the DCLG has now confirmed that changes to tenancy deposit protection, introduced by the Bill, will come into force on 6th April. Tenancies already in place on this date will have 30 days in which to comply with the new rules. Here’s a recap of the changes due to take effect as a result of The Localism Act:

30 days – not 14 – to protect deposits

From 6th April, landlords and letting agents have 30 days from receipt of deposit in which to protect it.

The re-wording and extension of this timeline also closes the loophole with regards to deposit protection deadlines that was highlighted by cases such as Universal Estates v Tiensia in 2010.

Now, if a deposit is not protected within 30 days, the tenant can take their landlord or letting agent to court – there is no other way to interpret this legislation.

Prescribed Information

The requirement for providing the Prescribed Information to the tenant will also be changed to within 30 days of receipt of the deposit.

Whilst we provide a template for Prescribed Information on our website, it is the landlord or letting agent’s responsibility to ensure it is issued at the correct times so it’s vital they review the Localism Act and understand when Prescribed Information should be issued.

No retrospective protection after the tenancy ends

If a tenant makes an application to the county court once the tenancy has ended, the landlord will no longer be able to retrospectively protect the deposit in order to comply with the Act. If the tenancy has ended, the only option is for the landlord to repay the deposit, or part thereof, to the tenant.

Revised sanctions for non protection

The changes give the courts discretion to award not less than the amount of the deposit and not more than three times that amount depending on the individual case. For example, a repeat offender may find themselves with a larger fine compared to a landlord who has simply forgotten to protect as  an administrative oversight.

Section 21 notices

Further clarity to Section 215 of the Housing Act highlights that a section 21 notice may not be given where a deposit has not been protected within the 30 day period. However, there are exceptions to this which you can view in The Localism Act.

For a comprehensive explanation of each change, read our blog from September 2011 – ‘Tenancy deposit protection amendments proposed by the Localism Bill’. You can also read the The Localism Act (section 184) and view the amendments against the Housing Act 2004 (sections 213 – 215 are relevant).

ADR Insight: DIY SOS - tenants painted my living room bright pink!

As a general rule, responsibility for decorating a property lies with the landlord. However, we see a number of disputes each year where the parties agreed to the tenant redecorating but the precise details were not clearly defined. Landlords who find that their calm and tranquil magnolia property has been returned in fuchsia pink, turquoise blue or pillar box red can be understandably shocked at the changes to the property. Here are a few of the statements we often see in evidence and the potential flaws with each of them:

1    Landlord says: ‘I told them it was ok if they used a neutral colour’

[caption id="attachment_964" align="alignright" width="300" caption="'You said yes, as long as it's neutral...yellow is neutral isn't it?'"][/caption]

What is a neutral colour? Most would assume magnolia, cream or beige but the landlord’s definition may be very different to the tenant’s, so it is helpful to be clear about what constitutes a ‘neutral’ colour.

2    Landlord says: ‘I told them they could use whatever colours they liked as long as they repainted it all back to original colours at the end of the tenancy’

If the details of the decorating agreement are not clearly set out in writing, it is difficult for the landlord to prove that such a discussion took place. Therefore it is unlikely to result in the claim being awarded in the landlord’s favour.

3    Landlord says: ‘I didn’t give permission’ but tenant says: ‘I told them I was going to redecorate and they didn’t object’ or alternatively ‘the landlord has been round many times since I redecorated and said how lovely it looked’.

Again, the precise details of any permitted decoration needs to be clearly defined.  Depending on what is said in the Tenancy Agreement, the tenant’s argument is unlikely to be persuasive in this instance, particularly if the agreement requires written permission from the landlord.

4    Landlord says: ‘I gave tenant permission to redecorate but they botched it and it looks awful’.

You may wish to include a requirement in the Tenancy Agreement that if the tenant is going to redecorate, the landlord is entitled to inspect the results. If they’re not satisfied the tenant can be asked to do it again, or the landlord can complete the works at the tenant’s cost. Alternatively, the landlord could insist that the tenant uses a professional to decorate the property.

Often Tenancy Agreements will state that the tenant can redecorate if the landlord’s written permission is given. Our adjudicators often see letters from landlords which simply allow the tenant to redecorate without stating the specific parameters. It is helpful to fully define them, so for instance an agreement may be drafted to confirm:

›       What rooms are being decorated

›       What colours are being used – this could include reference to colour charts or even sample wallpaper

›       Who is doing the redecoration – the tenant, or a professional decorator

Either way you should have something in writing, which is dated and signed by both the tenant and the landlord, that sets out the rules for redecoration so that the details agreed at the time can be absolutely proven.

Whilst disputes over redecorating are most common, if there is any agreement for other works to be carried out to the property by the tenant, such as alterations to the garden or carpets, or if for example appliances are being replaced, it is always prudent to document these and ensure that the terms are agreed by both parties at the time.

Our ‘Guide to tenancy deposits, disputes and damages’ provides comprehensive information and advice about deposit disputes – you can download the guide from our website.

ADR Insight – don’t neglect your rental property over the Christmas period

As you know, you can never fully switch off from your responsibilities as a landlord, whether that be taking on new tenants, completing deposit disputes or making sure your property is kept in good condition over the festive period. There are a couple of things you can do to make sure your properties are in order, ensuring the safety of your tenants and hopefully a stress-free Christmas for you.

Are your tenants leaving the property over Christmas?

Our adjudication team received a lot of claims earlier this year following the severe winter weather in 2010. The majority were the result of burst or frozen pipes at student houses where tenants had left the property to spend Christmas with their families.

In the worst cases seen by our adjudicators over the years burst pipes have resulted in damage to carpets and flooring, kitchen appliances needing replacing and claims for lost rent whilst damage is repaired. Some landlords have faced repair bills of several thousand pounds.

To avoid this stress and expense, you should contact your tenants if they’re going away to ensure that the proper measures are taken to avoid this kind of damage.

The AIIC has issued some guidance on keeping your properties safe during cold spells:

›   Insulation – Ensure water pipes and tanks are lagged and insulated.

›   Heating – Advise tenants to keep the heating on, at a min. of 15 degrees, if they’re going away. It’s also sensible to open the loft hatch allowing air to circulate and prevent pipes freezing and bursting in the loft.

›   Boiler servicing – Ensure that gas and oil boilers are serviced every 12 months.

›   If the property is going to be empty for an extended period it’s sensible to have the heating/water system drained by a qualified contractor.

›   Chimneys – Ensure they are swept once a year by a professional chimney sweep, ideally before the tenant starts using the fire.

›   Smoke Alarms – Check that smoke alarms are fitted in all properties and that they are all working properly. Replace batteries as necessary.

Be aware of evidence submission deadlines

If you’ve currently got a deposit in dispute then don’t forget to stick to your evidence submission deadlines. The DPS is not extending any deadlines but is making allowances for bank holidays so if you’re concerned about a deadline then get in touch so we can see what we can do for you.

Our Christmas opening hours

If you’re taking on new tenants over Christmas or the New Year you can submit deposits at any time online. If you need assistance our contact centre opening hours are:

Friday 23rd - 8:30am – 4:00pm

Monday 26th - CLOSED 

Tuesday 27th - CLOSED 

Wednesday 28th – 8:30am – 5:30pm

Thursday 29th – 8:30am – 5:30pm

Friday 30th - 8:30am – 5:00pm

Monday 2nd - CLOSED

You can also get in touch via online form or why not ask Emma, our online customer service agent.

Finally, a very merry Christmas to you from everyone at The DPS!

The DPS makes tenancy deposit protection even easier

We’ve made protecting and returning tenants’ deposits even easier with our latest service enhancements. As well as a new look website which launched successfully this week, we’ve introduced:

› Repayment ID reminders via text message › ‘Organisation’ as a new registration category › Incremental deposit payments › Simplified direct transfer process › Ability to cancel joint repayment claims started in error

The enhancements are part of our ongoing commitment to simplify deposit protection and, more crucially, speed up the repayment process.

Whilst repaying deposits only takes two days once we have agreement from both parties, the biggest barrier is misplaced repayment IDs by both tenants and landlords each month – without these, they cannot start or complete the deposit repayment process.

The latest addition to our SMS service is the fastest way for tenants to receive repayment ID reminders. Tenants simply text us and ask for a repayment ID reminder. We’ll then instantly issue the reminder via return text message. Tenants can only use this service if their mobile number is registered, so it’s important that landlords register the correct mobile number for their tenants.

The enhancements also coincide with our application for a licence to take our considerable experience as the UK's only custodial tenancy deposit protection scheme and apply it to Scotland.

Here’s a little more information on each of the enhancements launched this weekend:

SMS repayment ID reminders Tenants can text The DPS requesting a reminder of their repayment ID. The DPS will instantly issue the reminder via return text message so it is important that landlords ensure a correct mobile phone number is registered for their tenants.

New registration type Organisations such as NHS Trusts, companies or Universities can register deposits as an ‘organisation’ rather than ‘letting agent’ or ‘landlord’, if they do not fall into either of these two categories.

Incremental deposit payments Landlords, letting agents and other organisations can now pay deposits in stages if their tenant is unable to pay the full deposit upfront, or has agreed a payment plan prior to taking the tenancy.

Enhanced direct transfer payment service This enhanced process makes it easier for landlords, letting agents and other organisations to pay for new deposits.

Ability to cancel joint repayments if started in error Previously the requesting party would have had to contact The DPS to rectify any errors, causing delays in getting their deposits back.

Revamped website The new website allows easier navigation to the pages that visitors need to access. Whether the user is already registered and protecting deposits or simply browsing the site, they can quickly access information that is relevant to them with regard to managing deposits or getting help online.

For more information visit our new-look website.

ADR Insight: Stick to the facts and don’t get personal

They don’t call it dispute resolution for nothing – but there are some cases that take disputes over deposits to a more personal level. Landlords and tenants enter into a contractual relationship and, like any other relationship, this can ‘irretrievably break down’ during the course of the tenancy.

We’ve seen several cases where this has happened. The relationship breaks down to such an extent that tenants withhold rent as they feel the landlord hasn’t maintained the property correctly, or in some cases, the aggrieved tenant has trashed a property as a result of the disagreement.

When it comes to a head like this, adjudicators can be left to deal with the fallout and find themselves wading through lengthy and heated email or text message exchanges between the parties in order to establish the real facts of the case.

A recent case got so personal that it wouldn’t have been out of place on ‘Jeremy Kyle’! The initial evidence involved a 13-page typewritten submission which was largely a tirade of abuse – referring to the other party as, amongst other things, habitual liars, alcoholics, weak, lonely, unhappy, angry, unbalanced and violent. 

Not surprisingly, the other party responded with an 18-page typewritten submission that claimed their opponents were abusive and rude, harassed them, made personal insults, had mental health issues, threatened them and made nuisance calls to them.

With this abundance of excess information, the real facts of the case can get lost and in some cases delay a decision due to the sheer volume of correspondence to trawl through. It can also confuse the outcome and mean that a fair decision cannot be made.

Whilst our adjudicators wouldn’t ever prevent the disputing parties providing anything which they feel is required for the adjudicator to come to their decision, it’s advisable to stick to the facts where possible.

Attempts to assassinate the character of the other party are rarely helpful to the claim and are unlikely to be given much weight by the adjudicator. A clear and factual account of the tenancy, a chronology of events, clear evidence of the condition of the property and invoices/estimates/receipts will always be much more persuasive.

If you need help or guidance on how to tackle a deposit dispute our ‘Guide to Tenancy Deposits, Disputes and Damages’ gives further information on the adjudication process and the way a decision will be reached.

Kevin Winchester shares his approach to avoiding deposit disputes

[caption id="attachment_886" align="alignright" width="200" caption="Kevin Winchester, MD of Winchester Lettings"][/caption] Since the law regarding deposits paid by tenants to landlords or lettings agents changed in April 2007, disputes over the deposit have been a common problem at the end of the tenancy. For example, the landlord will say the tenant has damaged something and the tenant will say it was like it when they moved in.

I can thankfully say that we’ve been one of the few agents that haven’t had this problem and below are some of the reasons why we never really get disputes.

First and foremost, we produce a very detailed check-in inventory and schedule of condition. The more time taken compiling one the better, with date and time stamped photos preferably as these can be used to show a very real portrayal of how the property was handed to a tenant. If the property is professionally cleaned beforehand keep the receipt and add a copy of it to the inventory. Both the landlord / agent / check-in clerk and tenant should mutually agree that the inventory is accurate. I’ve seen some pretty basic inventories in my time and it’s this type that is open to being ambiguous.

Don’t rely on a very tight tenancy agreement with clauses about cleaning etc. as these types of clauses can be deemed unfair – see the Office of Fair Trading website regarding unfair tenancy terms.

Carry out regular inspections on your properties; mark my words if you never make any inspections you may end up getting a shock when they leave. I’d suggest a visit once a quarter as a minimum - ideally on different dates and times – and take a camera to log any damage caused; it’s a great way of ensuring your tenants are looking after the property and if anything is of concern it can be nipped in the bud straight away.

If you have to provide maintenance to a rented property don’t ignore it as these problems will get worse over time and cause more damage to your property. Landlords have to comply with the statutory repair obligations in section 11 of the Landlord and Tenant Act 1985, and if you get work done promptly then a tenant will be a lot more conscious that you like to keep things nice.

When you receive notice from your tenant that he/she intends to vacate, send them a letter prior to check-out advising them of your expectations and arrangements for key handover and final meter readings. We always add instructions for things like cleaning and gardening to this letter to highlight what we expect to be done prior to the meeting. We also send a copy of the check-in inventory for the tenant to refer to.

A couple of days before the check-out meeting make another inspection; this is your chance to assess any potential problems you could face at the exit meeting. Again take photos and document what you see.

The check-out meeting should be conducted using the agreed check-in inventory and it’s at this point that you’ll need to assess what is genuine wear and tear or what is actual damage - if there is any!

If you need advice on what is considered fair wear and tear then I suggest you buy 'A Guide to Best Practice for Inventory Providers’ which you can get from The Association of Professional Inventory Providers. If you’re not a member of a professional body it will cost you around £100.00 which is a worthwhile investment – we refer to it all the time!

If there is a dilapidation that needs to be addresses, try making an agreement with your tenant there and then and discuss the likely cost to rectify. For instance, if the property has not been cleaned but you had the property professionally cleaned prior to them moving in, refer to the receipt in the inventory as the cost is already there.

If you need to get quotes for any work then aim to get at least 3 so you can show due diligence in obtaining the best contractor. It’s also a requirement if you decide to use an ADR service.

Finally, always try to come to an amicable agreement regarding the repayment of a tenant’s deposit: remember the golden rule - ‘the burden of proof lies with the landlord'.

Kevin is Managing Director of Winchester Lettings Group – based in Bromley, Kent – a dedicated property lettings specialist that deals with every aspect of residential lettings and property rental management.

These opinions are those of the writer and not necessarily those of The Deposit Protection Service.

ADR Insight: "But I was on holiday?"

We’re always advising landlords that for deposit dispute claims to be successful they have to provide as much relevant evidence to support their claim as possible, as this is absolutely crucial for adjudicators to make educated and informed decisions. However, it’s equally important that evidence is submitted within our published deadlines. Landlords have 14 days to submit all the evidence they would like considered in relation to their claim. If we don’t receive anything within the two weeks, we will repay the full amount to the tenant as we have nothing to assess the claim against.

When we receive the evidence, we send a summary to the tenant giving them 14 days to respond. Again, if there’s nothing received from the tenant, we repay the disputed amount to the landlord.

We appreciate that it is frustrating to both parties when the deposit that they believe they have a rightful claim to is repaid in this way, but the ADR process is intended to be a faster alternative to the courts which is why evidence submission deadlines are imposed.

To give yourself the best chance during a dispute, we offer the following advice :

›       Create a legally binding signed tenancy agreement

›       Provide a thorough inventory and schedule of condition report (signed)

›       Complete a check-in and check-out with the tenant present

›       Keep hold of all correspondence, invoices and other admin that may be relevant

Having done all that, you wouldn’t want to fall at the final hurdle so make sure you get everything to us within the 14 days.

If for any reason you can’t meet that deadline, let us know as soon as possible so we can arrange an extension for you.

For more information on ADR best practice, read our Essential Guide. There is further information on evidence and deposit disputes in our Guide to Tenancy Deposits, Disputes and Damages.

Government issues guidance to the lettings industry

Housing Minister Grant Shapps published new factsheets last week to give landlords and tenants a better understanding of their roles and responsibilities whilst renting or letting a property. The landlord factsheet provides advice on picking a letting agent, making sure the property is safe for tenants, producing tenancy agreements and inventories and protecting tenants’ deposits. The information for tenants includes tips on the legal requirements of renting, avoiding disputes and what to expect from landlords.

By providing access to better information on roles and responsibilities, Mr Shapps hopes that unnecessary disputes can be avoided during and at the end of assured shorthold tenancies.

The factsheets are free to download and you can access them here:

›       Top tips for landlords

›       Top tips for tenants 

They also include contact information for various organisations – like Shelter and Citizen’s Advice Bureau – that will be able to help if you’re looking for more information. 

We have also made the factsheets available on the tenant and landlord information sections of our website.

Tenancy deposit protection amendments proposed by the Localism Bill

At our ADR workshop in Leeds last week I was interested to learn that some of the attendees weren’t aware of the changes proposed by the Localism Bill that will affect tenancy deposit protection under the Housing Act 2004 (the Act). With that in mind I thought it would be useful to summarise them here:

30 days – not 14 – to protect deposits and issue Prescribed Information

Currently the Housing Act requires that landlords/letting agents protect a tenant’s deposit within 14 days from the day it is received – the Localism Bill has proposed that this be amended to 30 days. This will remove landlord’s/agents’ ability to rely on ‘administrative oversight’ for any delay in protection.

The requirement for providing the Prescribed Information to the tenant will also be changed to within 30 days of receipt of the deposit.

Closing the loophole

Following high profile court cases – like Universal Estates v Tiensia late last year – the Localism Bill has proposed a change that will close the loophole regarding the ‘initial requirements’.

Rather than it being mandatory to comply with the ‘initial requirements’ of a tenancy deposit scheme, the proposed change will give tenants the ability to approach a county court to enforce compliance by a landlord with its obligation to protect the deposit and supply the Prescribed Information – where this has not been done – within 30 days of receipt of the deposit.

Protection after the tenancy has ended

If a tenant makes an application to the county court once the tenancy has ended, the landlord will no longer be able to retrospectively protect the deposit in order to comply with the Act.

Currently the courts can order either the repayment of the deposit to the tenant, or the immediate protection of the deposit with a custodial scheme. A new proposed subsection to the Act will ensure that if the tenancy has ended, the only option is for the landlord to repay the deposit, or part thereof, to the tenant.

Revised sanctions for non protection

Currently, if a landlord is required to pay a fine to the tenant for failing to comply with the Act, then the judge has to award three times the amount of the deposit. Under the new proposals the Judge will have discretion to award not less than the amount of the deposit and not more than three times that amount.

Section 21 notices

Section 215 of the Housing Act will also be amended to provide clarity that a section 21 notice may not be given where a deposit has not been protected within the 30 day period under section 213(3) or (6), however this prohibition may be mitigated where:

  • the deposit has been returned to the tenant in full or with such deductions as have been agreed;
  • an application to the county court under section 214 has been made and has been determined by the court or withdrawn or settled between the parties.

The above changes are awaiting Royal Assent; if they’re passed they will come into force in April 2012. We’ll keep you updated on the progress of the Bill and if passed we’ll let you know of any enhancements we’ll implement to stay ahead of the changes.

To familiarise yourselves further with the proposed changes, have a look at the Localism Bill (section 171) and view the amendments against the Housing Act 2004 (sections 213 – 215 are relevant).

ADR Insight: A cautionary tale for landlords overseas

We’ve seen claims recently from overseas landlords who’ve fallen foul of the provisions of Section 48 Landlord and Tenant Act 1987 which requires landlords living overseas to provide an ‘address for service’ to the tenant. This address must be in England or Wales and we often find it’s the address of their estate agent, or possibly a friend or family member who looks after the property when they’re abroad.

Unfortunately some landlords don’t comply with this but they need to beware – the consequences for failing to comply with this provision are severe. The Act states that until the landlord provides a valid ‘address for service’, no rent is lawfully due from the tenant and we have seen claims where landlords find themselves vastly out of pocket, simply because they didn’t add this to the tenancy agreement.

We’ve also seen landlords give the address of the property itself as the ‘address for service’. Whilst this appears to comply with Section 48 requirements, it’s not wholly practical. For example, in the past we’ve dealt with claims for damage where the tenant’s defence was that it occurred as a result of a problem with the property (such as a leak or flood). They’d notified the landlord of the need for repair by sending a letter to the ‘address for service’ – here you see the flaw – which turned out to be their own home!

In these instances, there was no provision in the tenancy agreement that required the tenant to forward the landlord’s mail on to them, so the claims for damage failed – the tenants had done everything they were contractually required to do. 

So, whilst the property address would seem to fit the bill, think about how it would work in practice. If the tenant is going to vacate, as a landlord you need to receive notice of that. If all that the contract requires the tenant to do is equivalent to leaving their vacation notice sat on their own kitchen table for a month, it’s not much use to an overseas landlord who will remain blissfully unaware that their tenants are packing up and moving out!

ADR Insight: ‘Rogue’ landlords – fact or media fiction?

Lately, there’s been a strong media focus on so-called ‘rogue landlords’ but is it always so one-sided? Our adjudicators tell us that they do on occasion see some quite shocking behaviour – by both landlords and tenants. Here’s some real-life examples of unreasonable landlord claims, recounted by those deciding cases on behalf of the DPS: 

  • One landlord claimed for loss of rent for the remainder of the fixed term of the tenancy. On the face of it this seems quite reasonable until you read the ‘notice’ they served on their tenants by email, giving them 24 hours to vacate the property. They did as they were told, but the landlord then insisted that they should still be liable to pay rent for the remainder of the fixed term.
  • Another landlord who, having received notice from their tenant, allowed a new tenant to move into the property a week or so before the outgoing tenant was due to vacate therefore denying the outgoing tenant the right of exclusive occupation of the property. 
  • And another landlord claimed a sum in excess of £3,500 for ‘late payment reminders’ when rent was paid a few days late on two occasions. Whilst it is of course accepted that there is a contractual obligation to pay rent on time, the landlord provided no evidence as to the extent of loss he suffered, or the number of reminders he had sent to get the rent paid. The landlord may well have been entitled to some reasonable compensation, but it is hard to see how a sum of over £3,500 for two slightly late payments can be justified.

They’ve also seen equally unreasonable behaviour by tenants, such as: 

  • One who left a huge amount of rubbish in the shed for their landlord to clear out; this included the decomposing body of the tenant’s cat
  • Another who rented a property and erected a completely unauthorised two-storey ‘home office’ extension to the garden shed
  • And a tenant who decided to ‘decorate’ their lounge without the landlord’s permission, using silver foil over the walls. From the photos supplied by the landlord, it looked like a dodgy 1970’s Dr Who set!

These issues could easily have been avoided if the parties had carefully read and understood the full extent of their obligations under the agreement. We’re often surprised at the number of people (tenants in particular) who tell us they didn’t keep a copy of their tenancy agreement. It’s absolutely vital for both parties to have a copy of this document available at all times for reference purposes. A quick check of the terms of the contract could easily avoid a number of the disputes which come to us for decision.

The above are examples of previous cases. Each ADR case is assessed independently by our adjudicators on the basis of the evidence presented to support the claim.

How can landlords improve their chances in a dispute? Guest blog by Pat Barber, AIIC

The DPS recently released figures showing that only 18 per cent of disputes over tenant’s deposits are won by landlords. This statistic could be vastly improved if landlords better protected themselves at the start, during and at the end of a tenancy agreement. For starters, some landlords are failing to put a letting contract in place, or they have very unfair clauses in the contact. Other landlords don’t conduct an adequate check-in and check-out, or don’t keep copies of correspondence with the tenant which could be evidence in a dispute.

It is so important for landlords to ensure they get all the paperwork right at the start and at the end of a new tenancy agreement. Over and over again, we see landlords losing disputes because they can’t provide the right evidence to show that a tenant has damaged the property.

Aside from ensuring there is a fair contract in place at the start of a tenancy agreement, landlords should have a thorough and detailed inventory which will enable both parties to be treated fairly and reasonably. By opening a dialogue and using an independent inventory clerk, disputes can be resolved quicker and without the hassle that is often experienced at the end of a tenancy period.

The AIIC has outlined some guidelines below to help landlords improve their chances in a potential dispute:

-   For new tenancies, landlords should ensure that the property starts the let in a clean and tidy condition. A tatty property will not magically improve by the end of a tenancy and landlords can’t charge their tenants for 'betterment'. Gardens - if your garden is hideously overgrown at the start, don’t expect any improvement on the day of check-out and don’t expect the tenants to put things right for you at their own expense.

-   Always address maintenance issues as soon as they are reported. We come across many cases of minor issues that have become major problems - which the tenant can prove were reported during their tenancy and which the landlord has not bothered to do anything about. This results in a property deteriorating, which in both the long and short term will affect re-letting capabilities and rent achieved.

-   Always have a properly compiled inventory. This will always be much more detailed than a landlord’s own document and will provide vital evidence in any end of tenancy dispute. Your tenants should check and sign their agreement detailing the inventory when they check-in.

-   End of the tenancy - always encourage your tenant to be present during the check out inspection. It is important that they are aware of any problems and chargeable issues to their deposit. This will avoid nasty disputes. Using a deposit scheme dispute service should always be a last resort. The landlord should make every effort to communicate and negotiate with their tenant.

-   Check-outs - use an independent inventory clerk as they will have the knowledge and experience to make sure this process runs smoothly. They can make sensible judgements on normal wear and tear, items that are the tenant's responsibility and landlord's maintenance issues.

-   Photography - detail is vital and fine detail is even better! Take dated photographs of the garden; interior of the shed or garage; inside of the oven; and keys handed over to tenants - these are the main areas of problems that occur and are often down to misinterpretation at the end of a tenancy. Remember, you don’t need photos of every single corner of the property, these are frankly a waste of time and effort (and would be impossible to do) - stick to the important things. Don’t try to produce a completely photographic or filmed inventory without a complete written accompanying inventory. Films and photographs alone will be of little use in a dispute when an adjudicator is trying to find hard evidence of a particular area.  You can bet the problem in question just won’t be something you have photographed in the first place!

-   Make sure your property is fit for letting - on check-in day, the place should be completely clean and any garden areas should be tidy, lawns cut, borders weeded etc. If you don't start correctly, then things definitely won’t improve by check-out day/end of tenancy and you'll end up with a very tatty property, which won’t be let easily. Tenants cannot be charged for improvements - for making good/cleaning things that were wrong at the start and are still wrong at the end of the tenancy.

-   Have a full check-in - where you or the inventory clerk check through every line of the inventory. Add any amendments needed and then ensure that the tenant signs the agreement. When moving out day comes, try to make sure that the tenant is present at the check-out and make sure all the problems are explained - nasty surprises later will cause certain disputes.

-   Always try to keep good communication ongoing with your tenants and encourage them to report any problems as and when they occur during the tenancy. This ensures that your property will stay in as good a condition as possible and will avoid problems at the end of the tenancy.

Pat Barber is Chair of the Association of Independent Inventory Clerks (AIIC). The AIIC is a not for profit membership organisation and is committed to excellence and professionalism in the property inventory process. The AIIC works hard to ensure that all landlords, tenants and letting agents understand the importance and benefits of professionally completed property inventories.

These opinions are those of the writer and not necessarily those of The Deposit Protection Service.