SMF - Just Installed!

extra deposit for pets.

Started by heavykarma, January 24, 2019, 02:00:45 PM

Previous topic - Next topic

heavykarma

My LA has emailed regarding new laws  affecting the size of deposit and other  fees that can be charged to tenants.He also says that landlords will be forbidden to charge an extra deposit for pets.This is not something I have ever done,mainly because I have not been informed of pets in advance,or have happily given consent to longterm tenants, without asking for extra money.

It may have an impact  though on rehoming rescue animals.Many more applications to adopt come in from private tenants than at one time.Many landlords will currently agree,with  an extra deposit. Is this just scaremongering,is there a way around it ?   

Hippogriff

#1
What has the LA cited... can we review it for ourselves?

Quote from: heavykarma on January 24, 2019, 02:00:45 PMHe also says that landlords will be forbidden to charge an extra deposit for pets.

Is this merely a side-consequence of the cap? So, if the cap is 1 month of rent, then every Landlord would go for that... so you cannot increase it, because it would then go above that?

It can probably only have a bad impact... Landlords will likely want to feel they're getting something 'extra' for the 'extra' risk they perceive... if nothing extra is forthcoming it's easier to just say "no"... which I'd assume is not covered in the new law. It's still a Landlord's market out there... at least for a while... there's plenty of Tenants vying for good properties.

Hippogriff

Increased Deposit amounts - sometimes up to 2x rent - have often been a tie-breaker for me when Tenants are in competition. It demonstrates good faith. The Tenants know it's all still their money, unless something goes awry, so it's just like a jam-jar for them... but I realise they have a good amount of savings and that gives me a confidence boost. Sometimes I have suggested this, sometimes it has been suggested to me.

KTC

The cap for deposit is 5 weeks equivalent of rent for dwellings where the annual rent total less than £50,000.

Yes, a pet deposit is just a tenancy deposit by another name, so the total amount will have to not exceed the 5 weeks worth.

heavykarma

Hi, this is the section relevant to my query:

Deposits

Deposits will be limited to 5 weeks rent as a maximum amount. This has gone up from the originally proposed limit of one month. We will not be able to charge any extra deposit for such things as pets.
The head of The association of residential letting agents commented:
Once again politicians are attacking the industry for their own purposes. Tenancy deposits have worked perfectly well for over a decade, and there is no basis in research that these amendments are necessary.
"This move will do nothing but push the most vulnerable in our society away from professional landlords and agents, and into the hands of rogue landlords and agents who will exploit them.   
David Cox, ARLA Propertymark Chief Executive

Breaches of the tenancy agreement

Costs incurred from breaches of the tenancy agreement by the tenant can still be charged. Reminder letters for these breaches are still perfectly acceptable and will continue to be so. The charges will have to be reasonable though and if asked the landlord will have to evidence that the costs were incurred.

What are the penalties for this?

Where a breach has occurred and a banned fee or payment is taken, tenants will be able to get any money wrongly paid back via the county court. Local Trading Standards are supposed to assist tenants with this in some fashion once it comes into force.

In addition, local trading standards will be required to enforce this legislation and will issue a fine of up to £5000 for a first offence. Subsequent breaches are criminal offences or alternatively, the landlord can be fined up to £30,000 as a civil penalty and be subject to a banning order.

Hippogriff

Where's this all written down on a .gov webpage? Is it?

KTC

https://services.parliament.uk/bills/2017-19/tenantfees.html has the bill progress through parliament and associated documents. The final version will be on legislation.gov.uk sometime in the next few days.

QuoteDeposits will be limited to 5 weeks rent as a maximum amount. This has gone up from the originally proposed limit of one month. We will not be able to charge any extra deposit for such things as pets.

Well, the original consultation may have suggested 4 weeks, but the original HoC bill had it at 6 weeks. The government finally accepted a Lords amendment down to 5. Then again, a Labour MP proposed an amendment down to 3. Hey ho.

You can require an extra deposit for pets, the total amount of deposit you have taken/requiring just can't be more than 5 weeks.

heavykarma

My La copied the full article from the journal of the Residential Landlord's Assoc.I can't see why a tenant who wants pets,and is prepared to pay an extra sum to a landlord for allowing this,should be prevented from doing so? Am I missing something,who stands to gain from this ?

Hippogriff

I don't see this as a major problem, for me it just removes a tie-breaker assistance lever. I insure my deposits, so when I get a nice one of £1,700 or something and the Tenants are there for a long time it actually is very beneficial... one fee, plenty of interest - the break-even point is less than 1 year (I think, I worked it out once). What worries me more is news that even private Landlords are going to have to become members of a redress scheme, and pay for the privilege. I fell across that yesterday as I was searching for more on this aspect.

I like to do things by the book... but I think I would consider it more sensible to allow better punishment for Landlords who've been naughty (or even totally unreasonable) rather than creating something else that is costly and mandatory... something to which all the good Landlords will dutifully sign up for, and the real bad 'uns will just ignore anyway... it doesn't matter if the punishment side hasn't got any better... yes, there's a £5,000 fine... so what? There's already fines they can receive and you only hear of a few who are successfully fined for being out-and-out dipshits.

heavykarma

I'm still confused re.the pets aspect.Does this mean that one can request an additional separate deposit for pets,as long as said amount does not exceed 5 weeks rent? Or is it meant to be included in the standard deposit, i.e.landlords could charge a higher rent to people wanting pets.Now got to look up this redress scheme,bugger! 

Hippogriff

The former.

The totality of the Deposit can be equivalent to 5 weeks (!)... how that's made-up is up to the two parties involved. Could be 4 weeks of rent and a sum for pets. I love how we're back to weeks... it's like LHA again... I work in calendar months myself. If you charge a higher rent to someone wanting a pet to be present that will be your prerogative, and always has been I suppose. I've never tried it.

heavykarma

Thank you.I can see some landlords just saying no pets,why have the aggravation,would not blame them. 

Hippogriff

What worries me is how a lot of this upcoming legislation seems to assume that all prospective Tenants are not tyre-kickers and time-wasters, whereas I know for sure that some are.

I had a couple view a house. Normal viewings would be 30 minutes, maybe 45 in exceptional circumstances. They were there for slightly over an hour, building rapport, taking pictures, saying how much they loved it, how perfect it was for them. All great signs. I told them about referencing, via UPad, and they were actually ecstatic at the news of "such low fees"... but when I put forward the referencing request, they didn't respond... they went dark on me, they responded to my text messages politely enquiring with reassurances that they'd be on it soon... they weren't. I told them that I'd had to pause the advert on UPad while they were being referenced, meaning no-one else saw it, so I cancelled their request (whether it was fake or not)... I did one more viewing, that Tenant applied straight away, did the referencing thing, paid the fee, passed, moved in...

In that first scenario, I am currently assuming that I would believe these people, take what they said at face-value and then pay UPad their £75 referencing fee myself (as I would still want to do referencing, obviously), only for the prospective Tenants to not bother completing it, and I would then be £75 out-of-pocket with little to no comeback. Is that how this will all work? I would never contemplate gouging prospective Tenants on fees, but for them to put just a bit of skin into the game at the early stage brings an immense amount of extra confidence... of course, they may still fail... they may still fail massively... and they may know they'd fail badly... but what stops them putting themselves forward time and time again?

If I was a dodgy so-and-so who held a view that all Landlords were parasitic scum and deserve "everything they get" I could easily spend my weekends viewing housings, making an application I had no intention of following-through and having gullible Landlords pay to reference me...

Am I bonkers and paranoid or does this possibility actually exist?

heavykarma

I know estate agents get a lot of people viewings places for sale,just for a trip out and a chance to poke around someone else's house.Charities get people offering to volunteer so,other volunteers give up their time to do inductions,get references etc.then you never hear again.The oddest are those who then wait a couple of months and apply again, as if nothing had happened.I also wonder if people like the ones you mention could be prospective landlords,sizing up the competition? Why would a genuine person refuse to pay something upfront as a sign of good intent? I would not go into a shop and ask them to save a sofa for me,and not agree to a non-refundable deposit. 

Hippogriff

I think you've answered my question...

If I cannot (legally) get them to put some skin in the game by paying for their own referencing, then I can start to take a small Holding Deposit (which I've never done)... that's the skin in the game from them, but if they subsequently fail referencing (or, let's say, it's Accept with Guarantor) then can I keep that Holding Deposit if I don't proceed because of the result... but they, strictly speaking, have not actually pulled-out of the deal?

Something tells me no. Something tells me I'll take a bath on the referencing cost and the Holding Deposit.

KTC

Quote from: heavykarma on January 30, 2019, 03:27:45 PM
I would not go into a shop and ask them to save a sofa for me,and not agree to a non-refundable deposit.

But would you go into a shop and pay a non-refundable deposit, only for the shop to turn around and say they've decided to sell it to someone else because they like that other person better?

Quote from: Hippogriff on January 30, 2019, 03:41:17 PM
but if they subsequently fail referencing (or, let's say, it's Accept with Guarantor) then can I keep that Holding Deposit if I don't proceed because of the result... but they, strictly speaking, have not actually pulled-out of the deal?

Something tells me no. Something tells me I'll take a bath on the referencing cost and the Holding Deposit.

A landlord can withhold the holding deposit if the perspective tenant provided "false or misleading information". A landlord can also withhold the holding deposit if the landlord has taken "all reasonable steps to enter into a tenancy", but the perspective tenant fails to before the deadline. In both case, the landlord would have 7 days to notify the perspective tenant in writing that the landlord intends to withhold the deposit for whatever allowed reason.

Martha

Quote from: Hippogriff on January 30, 2019, 03:41:17 PM
I think you've answered my question...

If I cannot (legally) get them to put some skin in the game by paying for their own referencing, then I can start to take a small Holding Deposit (which I've never done)... that's the skin in the game from them, but if they subsequently fail referencing (or, let's say, it's Accept with Guarantor) then can I keep that Holding Deposit if I don't proceed because of the result... but they, strictly speaking, have not actually pulled-out of the deal?

Something tells me no. Something tells me I'll take a bath on the referencing cost and the Holding Deposit.

I would have thought it reasonable to return a holding deposit if the applicant fails vetting checks. 

heavykarma

It would still be a big point in their favour if they agreed to stump up.It could weed out the casual timewasters. 

Hippogriff

Quote from: Martha on January 30, 2019, 05:19:46 PMI would have thought it reasonable to return a holding deposit if the applicant fails vetting checks.

I believe I feel the opposite. I've even had a Muppet Tenant go through referencing they paid for in the past when they came back with about 6 CCJs and the Agent basically said "run" to me. That person claimed they weren't aware... possible, very unlikely (she worked in Debt Collection!)... so, envisage this for the future... a Muppet comes along to view, is interested, knows their credit is bad, but also knows that the Landlord pays for referencing so it's no skin off their nose, right, heck - the Landlord might not even do credit checks etc. because of the associated costs... so they just go ahead and apply, the Landlord pays for the checks and it comes back fire-engine-red (flashing and bleeping even)... if a Holding Deposit wasn't taken then you just reject the Tenant and you've taken a bath on the costs, I get that... but if a Holding Deposit was taken, surely it can be said / argued that they pulled out of the prospective agreement due to being Muppets, and liars? You didn't pull out of it (you did, but isn't there an argument?)... can you phrase the receipt for any Holding Deposit taken to such an effect that it'd work like this?

So I think your stance on this at the moment is very reasonable and fair... but I just wonder if it may change after, possibly, being taken for a ride by X Muppet Tenants.

Hippogriff

Is this kind of thing do-able...

XX YYYYYYYYYY Street, XXX YYY, is to be let, subject to satisfactory referencing conducted by [Whatever Method], on an Assured Shorthold Tenancy for an initial fixed term of 6 months.

The rental amount will be [£XXX] per month. The tenancy will commence on [YY YYY YYYY].

A Holding Deposit of £XXX is being taken, for which this is a receipt.

In return for this Holding Deposit being paid, no further viewings will be conducted with the property. If the prospective Tenant(s) fail to progress the tenancy – for any reason, including being unable to do so due to negative reference / credit checks – then the Holding Deposit will not be refunded and the property will be put on the market again.

Prior to commencement of the tenancy, after the Security Deposit (which will be protected with the [Your Favourite Scheme]) has been paid, this Holding Deposit will be returned in full.

KTC

You state in advance that your minimum criteria for a tenant are no bankruptacy, IVA, CCJ in the last six years, have an income of at least £X per year, etc. etc. Then you ask them to confirm in writing that they have no CCJs etc., what their income is, so on, and that they give consent for credit checks references etc. Then if the information come back differently when you do the checks, you can withhold the holding deposit on the grounds of having been given "false or misleading information".

In short, you'll be doing the checks to confirm what they told you is accurate, having already used what they told you to select the tenant, not to use the results of the check itself to make the decision.

Hippogriff


heavykarma

That sounds very reasonable.If they sign that they declare the information to be correct,how can they demand a refund? If they refuse to sign,you have your answer. 

KTC

Quote from: Hippogriff on January 31, 2019, 12:37:03 PM
Prior to commencement of the tenancy, after the Security Deposit (which will be protected with the [Your Favourite Scheme]) has been paid, this Holding Deposit will be returned in full.[/color]

You can use the holding deposit towards the tenancy deposit (or rent) with the agreement of the tenant. You would then be deemed to have received that amount of the tenancy deposit on the date of the tenancy agreement for the purpose of deposit protection.