Terms & Conditions

[peterdelamothe]

I was asked tonight by a very large private landlord in London the following:

“The requirement to protect deposits from April will add significantly to landlords’ administrative costs. We anticipate that assurred shorthold rents will need to rise by around £2 per week to cover this. Will this change in the law be taken into account by the Rent Service? Is the increase better shown as a service charge? Will LA’s be allowed to refer rents which have gone up as a direct result of his change i.e. within 52 weeks on the basis that the law has changed?”.

Answers please!

[Kevin D]

As requested, here are the answers…. (obviously, absolutely definitive….*cough*)…..

Will this change in the law be taken into account by the Rent Service?

[b:de81cd1103]Doubt it. It *may* filter through eventually by way of RODs naturally reflecting the resultant higher rents, but I can’t see the law being changed.[/b:de81cd1103]

Is the increase better shown as a service charge?

[b:de81cd1103]No. Because it isn’t a service charge. Even if it was a service charge AND eligible, it makes no practical difference. The ROD will still have to be applied.[/b:de81cd1103]

Will LA’s be allowed to refer rents which have gone up as a direct result of his change i.e. within 52 weeks on the basis that the law has changed?”.

[b:de81cd1103]No. Because the rule about the change having to be a term within a tenancy still exists. Although no final conclusion was reached, CH/1556/2006 didn’t change the interpretation of that aspect of law.[/b:de81cd1103] Further, although there has been a change in law, the change is not in [u:de81cd1103]benefits[/u:de81cd1103] law.

Regards

[andyrichards]

Not sure I’d want to break all this bad news to a “very large London private landlord” in person! 😆

[Anonymous]

Is it really going to increase their admin costs that significantly? There are three schemes available and one is being funded by some of the interest accrued from the deposits themselves.

They could always not take a deposit I suppose :13:

[andyrichards]

There is at least one organisation out there offering an “alternative” to the TDP scheme. Basically landlord does not take a deposit, they get tenantassure.com to “vet” the tenant in return for a fee (which they helpfully advise can be “passed on” to the tenant). They then say that they will meet costs of damage and default.

It could be perfectly legit but frankly the website could have been constructed by anybody and there is no evidence of any bond or consumer protection system in place if it gets into difficulties. I would have thought that it should be covered by some sort of regulatory body, but there is no indication that it is. Personally, I reckon landlords should approach it with extreme caution.

Amusingly, as part of its “pitch” it makes the fairly modest requirements of the TDP (like looking after tenants’ money, keeping tenants informed and having an independent disputes resolution service) sound like the coming of Armageddon!

[Author]

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