Can a theoretical deposit be relabelled rent?

by Readers Question

14:22 PM, 4th October 2016
About 4 years ago

Can a theoretical deposit be relabelled rent?

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Can a theoretical deposit be relabelled rent?

A fellow landlord found themselves in the unenviable position of landing a tenant whose history was hidden but rapidly caught up with them after only 6 weeks in the property.jif

The paperwork was fine and the prospective tenant had a backstory worthy of Harry Pearce himself. Now, with 8 weeks hindsight the clues are there; I doubt a bank would have spotted them.

The tenant moved in without funds for rent and deposit being cleared. After a short delay and many attempts (apparently it’s the banks fault), the tenant’s father managed to make a payment to the landlord and the tenant called it ‘the deposit’.

No rent though. Apparently the tenant has as many difficulties with incompetent banks as the father.

The landlord hung on to the deposit outside the deposit scheme they usually use whilst the tenant made and broke many promises to pay rent. The landlord has their own cash flow to mind and was forced (by the need for their own survival) to pay their mortgage with some of the deposit.

But on day 31 of ‘the deposit’ being handed over the landlord was (and this is rather a strong word, I can think of no other) blackmailed regarding penalties as it wasn’t deposited within 31 days.

Still no rent.

So, my question is simple and in two parts…

The tenant has failed to pay any rent and the tenant’s bank continues to be incompetent (Apparently). Rent, by agreement should have been monthly in advance. Can a landlord re-label the money previously handed over as ‘the deposit’ to cover unpaid rent?

The landlord (is not me by the way) is seeking an eviction Section 8 – non-payment of rent, fraudulent references and two other unpleasant clauses. It is clear to me that this will go to the bailiff stage. The landlord will refuse to release the deposit, but they are desperately worried that the Deposit Scheme rules will find against them. Does anyone know what their view might be?

Thanks

Hamish


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Comments

Gary Nock

10:04 AM, 6th October 2016
About 4 years ago

With a good referencing agency then the credit check, bank account check, previous address check, employment check, previous rental check will expose anomalies which will ring alarm bells. That is unless they have a complete new ID as part of a witness protection programme or have terrorist links where a fake ID is provided. But they have to be very good and cover all the ground to avoid suspicion.

Ian Narbeth

10:13 AM, 6th October 2016
About 4 years ago

Calm down everyone! We have comments in this thread about blackmail, the tenant being a fraudster (on minimal evidence) and now witness protection programmes and terrorist links! The tenant is asserting rights the law has given him. We may not agree with the law and may think the scales are tipped against landlords (they are, get over it), but that is the law. The landlord has been imprudent in letting the tenant in without proper checks and without getting money up front but has not complied with his obligations. It does no good to throw mud at the tenant. Yes, he may be a wiseacre who knows the law but the courts will be sympathetic to him and distinctly unsympathetic to landlords who bleat about how unfair life is.

Hamish McBloggs

11:44 AM, 6th October 2016
About 4 years ago

Reply to the comment left by "Ian Narbeth" at "06/10/2016 - 10:13":

Ian,

I had to 'set the scene'; none of it made up. I would hope that the hypotheticals were thoroughly debated before the act was passed.

I wanted to (calmly) explore the landscape and there are always two sides.

We became 'accidental' landlords 25 years ago and have learned on the job. It is not something I would recommend. The internet has made the learning easier, the information volume and complexity can be overwhelming. So whether that's better is up for debate. In our 25 years we have one bad tenant. We have had two very peculiar tenants, each to their own eh?.

Resources such as this forum are invaluable. Changes in tax, legionnaire's tests, local authorities, the less well publicised rules that require compliance brought to the fore. I only found out about the 'authorised user' on utility accounts recently;

Though I do worry when a friend waxed lyrical regarding their recent and surprising 'breaking into the market' as a new landlord (didn't see that one coming); their words suggesting a steep learning curve. But we all start somewhere.

We continue to have regular contact with some of our ex-tenants; even had letters of thanks and the occasional Christmas card.

I think I broadly have the measure of this now so I will attempt to summarise in 2 points:

1. Landlord has made a mistake, there may be some mitigation of the penalty.

2. Reference reference reference.

3. Accurate record keeping.

... that's 3 points. No one expected that

Cardinal Hamish Ximinez

Ian Narbeth

11:49 AM, 6th October 2016
About 4 years ago

Reply to the comment left by "Hamish McBloggs" at "06/10/2016 - 11:44":

Are you by any chance related to my good friend Pedro? A very sweet unctuous character.

Hamish McBloggs

13:10 PM, 6th October 2016
About 4 years ago

Reply to the comment left by "Ian Narbeth" at "06/10/2016 - 11:49":

Ah, the old boss, I may have had the bigger hat.

Lisé Willcox

0:48 AM, 19th October 2016
About 4 years ago

I personally believe a landlord should have at least 6 months worth of rent in reserve, some evictions can take that long... Christmas, young children or disability means evictions will take sometime. A landlord also needs to have enough to deal with emergency boiler replacements... I once had two go for completely different reasons in the same week.

In these times of financial change and Universal Credit, Christmas looming ... Well double it and watch carefully..... This industry is hard work.... But I really appreciate my good tenants.... And they are on the Christmas list too!

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