New Landlord help needed please

by Readers Question

8:46 AM, 19th August 2014
About 4 years ago

New Landlord help needed please

Make Text Bigger
New Landlord help needed please

Dear Members,

This is my first post so please be gentle. I am not a landlord myself but write on behalf of my daughter who is a new landlord.

She purchased the house next door to us after separating from her first husband. After a while she met somebody else and eventually married her new man and moved into the house he owns. When she purchased the property house prices were at the very best, since then house prices have dropped which would have meant had she decided to sell at the time she would have lost around £20,000, so she decided to rent her property out until house prices began to pick up again then possibly sell the house.

This is where the problems start. Not knowing the complex laws regarding property letting she let the house to a lady with a child. The lady gave a bond of £350 when she moved in and is paying £500 per calendar month rent. After numerous problems with this lady my daughter has decided to ask her to leave the property and issued her with a section 21 notice.

When the tenant paid the £350 bond my daughter was unaware that she had to put the bond into a bond scheme, naïve on her part I know but she just didn’t know about it. Anyway, since the section 21 notice was issued the tenant has gone to the local housing advice centre who has told her the section 21 notice is invalid because the bond was not placed in a scheme. I must point out that there is no problem with the bond being returned to the tenant at the end of her tenancy. New Landlord help needed please

Since all this my daughter has placed the bond into a holding scheme. Also the tenant has advised my daughter that she intends to move out on the 14th September so can somebody tell me what to do, has the local housing association got any power to intervene, is my daughter in big trouble or do we just leave it until the tenant moves out then give her her bond back.

Any advice would be gratefully received

Many thanks

Graham



Comments

Mark Alexander

9:00 AM, 19th August 2014
About 4 years ago

Hi Graham

The advice given you your daughters tenant is correct, the section 21 notice is not valid. The only way for her to serve a valid section 21 notice now would be to refund the tenants deposit first and then to re-serve. Hopefully this will not be the case.

Your daughters tenant has what is known in legal terms as a "chose in action" (Google it). This is a legal right to make a claim, in this case for refund of the deposit and up to 3 times the deposit. She has up to six years to make this claim. This is the penalty for breaking a law, even if a person is oblivious to that law. Ignorance of the law is not an acceptable defence.

There is every chance that your daughters tenant is oblivious to her rights too. However, there are a lot of "no-win-no-fee" companies chasing this business so you daughter will have a sword hanging over her head for up to six years. There is also a chance that her tenant is already aware of her rights and just biding her time.

The good news is that you daughter might be able to do something more positive than bury her head in the sand and rely on a strategy of hope. She can try to negotiate with her tenant and offer a payment in full and final settlement. I suggest this is legally documented if this is the preferred and agreed option. There are many ways to do this, one is settlement by agreement, another is an assignment of the chose in action to the landlord. Clearly the landlord would never exercise her rights to sue herself!

The problems could intensify if the property is damaged or if the tenant fails to move out on the agreed date. In both cases there are solutions but they are not cheap. The likelihood, if the tenant is properly advised, is that your daughter will have no choice other than to refund the deposit first, then re-serve section 21. Her tenant will then be advised to exercise her chose in action. If damage has been caused to the property, and can be proven with inventories, time dated pictures and or video, before and after the tenancy, then your daughter may have grounds for a counter claim.

I appreciate this is not the news you will have wanted but I can assure you that I have been as gentle as possible and stuck to the facts.

Good luck!

PS - if your daughter decides to re-let please see >>> http://www.property118.com/find-me-a-tenant/
.

Grayo Athome

11:03 AM, 19th August 2014
About 4 years ago

Mark, Thank you very much for your reply its good to know there are people like your good self only to willing to offer help and advice.

Mark, I suspect the tenant is fully aware of all her options having already been evicted from a property her own mother owns, again naivety on my daughters part as she should have done a check on her prior to giving her a tenancy agreement. All this hassle has left a bad taste in the mouth and probably think once the tenant leaves the property my daughter will probably put the house up for sale and take a hit in the price difference.

Once again thank you very much for your help and advice.

Regards

Graham

Mark Alexander

15:11 PM, 19th August 2014
About 4 years ago

Reply to the comment left by "Grayo Athome" at "19/08/2014 - 11:03":

Hi Graham

You are most welcome, you may wish to show your appreciation by making a donation to support the running costs of this forum - please see >>> http://www.property118.com/donations/43590/

I fully appreciate that your daughter has endured a tough learning experience, however, it needn't be that way. I own a very large portfolio which provides the vast majority of my personal income these days. The hassle factor is virtually zero as everything is outsourced. Please ask you daughter to read this >> http://www.property118.com/full-property-management-from-just-14-99-a-month/34413/
.

Grayo Athome

20:50 PM, 19th August 2014
About 4 years ago

Thank you for the reply Mark and also the link you provided I will forward this on to my daughter. I have also made a donation towards the running cost unfortunately it's not a large amount but every little bit helps as they say.

Regards

Graham

Farah Stehrenberger

21:57 PM, 19th August 2014
About 4 years ago

Hi Graham

In addition to Mark's comments I would like to add:

you mentioned that your 'daughter has placed the bond into a holding scheme', after placing the bond into a scheme or returning the deposit, your daughter can serve a valid section 21 notice. If the deposit is returned by a cheque, a s. 21 cannot be served until the cheque has been cleared.

I actually dealt with two cases where the tenants argued that the deposit was not secured within the time limit therefore s. 21 was invalid, the judge replied that the tenant cannot expect the landlord to be punished forever etc, in one case the landlord secured the deposit before the service of s. 21 notice, in the 2nd case, the landlord returned the deposit.

The local authorities intervene because they want their tenants to stay where they are, it saves them rehousing. They even advice tenants to file defence just to buy time even though when there is no defence. I do a lot of landlord's work therefore come across all sort of situations with the local authorities and tenants.

Anyway, lets hope that your daughter's tenant will move out in Sep.

All the best

Grayo Athome

22:30 PM, 19th August 2014
About 4 years ago

Hi Farah,

Thank you very much for your reply. My daughter had a letter from the local housing advice centre which implied they had some sort of authority regarding this matter even telling my daughter to reply by return post to which she hasn't. The tenant sent my daughter a letter after she received the s.21 notice saying she intends to move out on the 14th September so I think what my daughter is going to do is wait and see if she goes or not.

The day she moves out she will have her bond back in cash if she decides not to leave on the date she said then she will have her bond back anyway then a new s.21 notice will be served but with a bit of luck she will go. My daughter has already had a phone call from a letting agent asking for a reference for this tenant and we have also heard that she was viewing a house a couple of streets away so fingers crossed.

Regards

Graham

Mark Alexander

8:31 AM, 20th August 2014
About 4 years ago

Reply to the comment left by "Grayo Athome" at "19/08/2014 - 22:30":

Don't return the deposit in cash unless you get a receipt. It will be much better to transfer the money directly into the tenants bank account using electronic banking, that way there is an audit trail if it is required.

What are you going to do about the reference?
.

Grayo Athome

10:10 AM, 20th August 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "20/08/2014 - 08:31":

Hi Mark,

Thanks for the advice regarding paying the deposit back. I will tell my daughter to use bank transfer to give it back although she would have had a signed receipt from the tenant upon receiving the deposit back in cash.

Regarding the reference all they asked were three simple questions which were easily answered and answered truly.

Farah Stehrenberger

12:08 PM, 20th August 2014
About 4 years ago

I agree with Mark's comments re return of deposit.

It would be interesting to see what the local authority said in their letter, is it possible to attach a document with comments?

I had a problem tenant (my client actually), I served eviction papers on the tenant, local authority contacted me to stop the eviction, the tenant was in arrears for more than £4,000, I asked them to pay the arrears and my costs, they agreed on a term that I renewed the tenancy. I agreed but this time I gave the tenant only a one month tenancy and included her boyfriend as a tenant too to ensure that we could recover any debt from the boyfriend as he was employed. I also served a s.21 notice on the same day as the tenancy.

Next time when I served eviction papers, local authority contacted me again, saying that I could not evict this tenant because the tenancy had not expired, I gave them a copy of the tenancy and s.21 notice, never heard back.

I just don't like local authorities behaving like a God and pushing people around.

Grayo Athome

12:41 PM, 20th August 2014
About 4 years ago

Hi Farah,

How do I attach a document with comments ???

Thanks

Graham

1 2 4

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Shelter’s Head of Research misled public on TV

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More