George Crofts LLB

Registered with Property118.com
Tuesday 13th August 2013


Latest Comments

Total Number of Property118 Comments: 17

George Crofts LLB

13:43 PM, 29th August 2015
About 5 years ago

Should prospective tenant be avoided after offering 12 months rent upfront

Hi Emma

I'm a tenant that has been in this situation so maybe my input can help.

When I moved from the South to the North I was moving to study. I had just finished uni (so no regular income showing on my bank) and no job lined up (just about to start my postgrad). I ended up paying 6 month in advance (from savings) to secure the property I wanted because no landlord or agent would take me (too high risk). We had to deal totally at a distance. I met them on day 1 and presented my passport as proof of I.D and paid the 6 months plus deposit and signed the AST.

I'm about to move back down South and I'm in the same situation: no regular income but this time I have a job lined up. I've paid referencing fees to both my current and future agent. My future employer also had to write a letter (I had to give them authority to speak to the agent/landlord but otherwise they were fine to do this). On the basis of all of these checks, I've managed to secure a property without paying so much upfront .

You should know, I would have offered rent upfront for the perfect property.

What I want you to take away from the above is that there are, at least, some circumstances where relative covenant strength demands paying more upfront. Even so, 12 months is a lot. If it were I, I would have started lower (maybe quarterly rent in advance and go to 6 months if pushed). If I was asked to pay 12 months in advance, I'd want a reduction in rent to reflect this.

If the tenant's circumstances are such a perfect storm that he needs to offer this much money upfront to get the property, he should be bending over backwards to show that he is not a risk. This includes asking his future employer to give a reference and giving as much information as possible.

It may be that there is something illegitimate here but this is a judgement call you need to make based on investigation. Ask the potential tenant where the money is coming from. You need to know, potentially for money laundering but also because, if the deposit is paid by a third party they need to be served prescribed information.

If someone else is funding the tenancy, ask them for a guarantee. Ask for a guarantee anyway if it make you more comfortable.

In regard to the AST, one thing to think about is what happens at the end. If it becomes a statutory periodic tenancy, the tenancy period will be 12 months with the rent due in advance. Is this what you and the tenant want? If not, the contract needs to deal with this.

Above, people have mentioned cannabis farms. There's another thread somewhere about potential criminal liability of a landlord in these circumstances. Aside from this, and on a practical level, cannabis farms produce moisture. In a loft space, this can literally rot the roof.

Even though the rent is paid in advance, you will still need to keep on top of this one and regularly inspect. If you inspect every quarter and take meter readings you'll know if the usage is too high (indicative of a farm). Keep an eye out for damp and any other obvious signs.

I do not think anyone would blame you for not taking this tenant. A good rule of thumb is "If it seems too good to be true, it probably is"...

Even if this tenant is a bona fide applicant that NEEDS a property because he has a job starting soon, you saying no won't end his world. If he has 12 months rent at his disposal, he could rent a hotel room on a weekly basis or find a room in a house for a short term until he is established.

If you are going to reject him, you could suggest the above short term solutions and ask him to reapply in a months time (i.e after he has his employment contract signed and can show income). Probable, if you do this, you will never hear from him again. If he does come back to you, it'll be as a local applicant with proof of employment and you can assess again.

I hope that you find something useful in this rather long and rambling post!... Read More

George Crofts LLB

5:06 AM, 5th May 2015
About 6 years ago

Deposit protected and confirmed in writing but no prescribed information?

Come on guys, it's not that hard...

Protect the deposit, then give the tenant the minimum information about the scheme that the law requires.

It's not even that much information. You need to tell the tenant which scheme you use and how to use that scheme to dispute any deposit deductions. If you read The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (http://www.legislation.gov.uk/uksi/2007/797/article/2/made) you'll appreciate that this is very basic information that you need to give.

There is no point protecting a deposit if you're not going to tell the tenant who is protecting it and how they are protected. The court said as much in Ayannuga v Swindells and this was 2 and a half years ago.

Any professional, working in any market, needs to understand the legal framework they operate under. If you can't, or won't, do this, maybe pick another profession? At the very least, seek legal advice before putting yourself (and your tenants money) at risk.

In regard to the OP's situation, if you have not given then Prescribed Information, you have failed to comply with the law and a sanction applies. As ever, it's up to the tenant to spot this and chase it up. Ignorance, however, is never an excuse.

More interesting is the involvement of the local authority. If they paid the deposit on behalf of the tenant (which your post suggests), as a "relevant person" they also should have been served with the Prescribed Information (as per S213 (5) and (10) Housing Act 2004). Failure to do this also results in a sanction applying.... Read More

George Crofts LLB

18:07 PM, 1st April 2015
About 6 years ago

Tenant wanting to leave 2 weeks into 12 month contract

Reply to the comment left by "ashley " at "01/04/2015 - 16:50":

Hi Ashley

As you say, there is no continuing duty on the landlord to make sure the property is kept in a habitable state. For furnished tenancies, it only needs to be habitable at the start.

I do not think there is anything inherently unfair in making the tenant responsible for making sure a property is free from pests. If you look at the guidance produced by the OFT (a little dated now by still useful) there is a whole section about transferring inappropriate risks to tenants.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284440/oft356.pdf

A clause such as this might go too far and be unfair:

"To take all reasonable precautions necessary in the circumstances to prevent any damage to the the property by [pest and vermin] and in the event of such damage caused by the failure of the tenant to take such reasonable precautions the tenant shall immediately and at the tenant's own expense effect by properly qualified contracts all such repair and replacement as may be necessary to remove any [pest and vermin] and also to repair and make good any consequent damage that may have been caused to the property or the decorations thereof".

An example of a reworked clause could be:

"To take all reasonable precautions to prevent ingress of and damage occurring to the property by [pest and vermin], provided the landlord maintains the structure of the property to reasonably prevent ingress of [pest and vermin]".

The reworked clause balances the risk between the parties. The landlord needs to make sure there is not easy access for vermin and the tenant needs to make sure they don't encourage vermin.

If you do end up with fleas, rodents, slugs etc. and this is the tenant fault (storing rubbish/food inappropriately, keeping dirt animals) you will be able to hold the tenant to account.

If the ingress of vermin was a structural issue (e.g slugs coming through underneath doors or holes that allow rats and mice in) the landlord would need to resolve it.

The above clauses are for example purposes only. I do not suggest anyone use this wording without seeking legal advice. One situation that the example wording does not deal with is where rodents repeatedly breach into a property. Using my example wording, the tenant could suggest that the landlord needs to continually patch up mice/rat holes to prevent easy access. At the same time, the landlord would be suggesting that the rodents can only be coming in because of actions of the tenants (if there is no food available, rodents don't tend to come in).

As an aside, I know that it does seem attractive to make the tenant deal with such issues. The reality may be, though, that a tenant cannot afford to pay for an exterminator. If this is the case, you do yourself no good by simply telling the tenant to sort it. The situation would persist and all the while, it's your property that's being damaged.... Read More

George Crofts LLB

15:42 PM, 1st April 2015
About 6 years ago

Tenant wanting to leave 2 weeks into 12 month contract

At common law, there is in general no implied warranty on the part of a landlord that the demised premises are fit for the purpose for which they are taken. On the letting of an unfurnished dwelling house or flat there is no implied warranty on the part of the landlord that it is in a reasonably fit state for habitation.

The intending tenant is presumed to make his own inquiries as to its condition, and, in the absence of a special stipulation, he takes the house as it stands. If the house is, in fact, uninhabitable, then, after accepting the lease, the tenant is without remedy, except where he has obtained a warranty of fitness, or where he has been induced to take the lease by misrepresentation on the part of the landlord, in which case the tenant may be entitled to rescission or damages

The mere omission of the landlord to disclose defects is not such misrepresentation but the deliberate concealment of some defects may be conduct equivalent to a fraudulent misrepresentation.

On the letting of a furnished house, there is an implied condition that it is in a fit state for habitation at the commencement of the tenancy; and, if this condition is not fulfilled, the tenant is entitled to repudiate the contract at once.

He need not wait to give the landlord an opportunity for effecting repairs. It is a breach of the condition if there are substantial defects in the drainage, or if the house or any part of it is so infested with vermin as to be a source of serious inconvenience to the occupants; but not if there are merely ordinary defects of repair which may be easily remedied.

To fulfil the condition it is not enough that the landlord believes the house to be in a fit state for habitation; it must in fact be reasonably habitable. The implied condition may be treated also as a warranty, and the tenant may recover damages for the breach.

Given that you mention a fridge, I think it's safe to say this is a furnished property. If the property really was uninhabitable at the start of the tenancy (no shower, no fridge, potential mice infestation, renovation work needing to be carried out) then your tenants can set aside the tenancy and maybe pursue you for damages.

Your goal is to show that all of these issues have been exaggerated. The property was habitable and you were willing to do repairs etc. Even so, you accept that the tenant wants to leave and agree to end the tenancy. By not being greedy (asking the tenant to pay for referencing cost and cleaning cost) you can make this split as amicable as possible. You will want to avoid the tenants moving out, bringing a claim against you for breach of contract and asking for their moving costs, agents fees etc as damages.... Read More

George Crofts LLB

12:47 PM, 13th March 2015
About 6 years ago

How long can DPS keep a deposit for during a stalemate?

Hi Jason

You raise a very interesting question. I want to start by saying that I don't know the answer for sure so take the below with a pinch of salt...

The starting position has to be that the deposit is due back to the tenant. As the landlord, it's up to you to show that a valid deduction has arisen. In the absence of this, the deposit should be returned.

With this in mind, the question becomes, how long do you as a landlord have to claim against the deposit?

I posit that the normal rules of limitation would apply. You have 6 years to claim against the deposit and after this point, you are barred from making a deduction. Following this logic, the tenant could wait 6 years and then apply to the scheme to have the money released.

I can also imagine the reversal of this argument. Consider the situation where a tenant turns up 6 years and one day on from the end of the tenancy and asks, for the first time, for the deposit to be returned. I can imagine a landlord putting forward the argument that the tenant is barred from claiming the deposit back. This doesn't really fit your fact pattern though.

A third dimension would be to look at the situation from the schemes point of view. They are holding the money and are, essentially, waiting for either you or the tenant to claim this back from them. If 6 years go by and neither you nor the tenant claims the deposit back, could they say that the both of you are now barred from claiming the money from them and simply take this money?

I'm not sure a scheme would (or even could) do this. It should be noted though that there is an issue with DPS holding money it does not have a right to (http://www.depositprotection.com/documents/millions-of-pounds-of-unclaimed-deposits-are-returned.pdf) and I'd be worried about this deposit being lumped in with the rest. For unclaimed deposits at least, the approach seems to be for the scheme to return the money to the tenant.

@Mark I see you tweeted this question to the DPS. Hopefully, they can give a more intelligible answer!

As a closing thought, Jason, if you didn't want to go down the court route, why did you opt out of ADR? It seems to me that both you and the tenant would have been better off resolving this dispute. The stalemate situation you describe does nobody any good (aside from the scheme who is now getting interest on the money).... Read More