Lots of people live in privately rented property; whether they are young people moving away from home to live in a bed-sit or shared house; or those waiting to buy a house of their own; or those who enjoy the flexibility of renting particularly if their employment requires them to move around the country.
Changes to legislation affecting residential tenancies has meant that residential agreements are less "legalised" than in the past, simply because most residential tenancies are now shorthold with the tenants having no right to stay on in the house after the landlord has served a proper notice to quit.
If you are thinking of going into rented property you do need to carefully consider the tenancy agreement you are offered, particularly your repairing and decorating obligations, not just for the fabric of the building, but for the furniture as well. If you have no record of the state of the property and its furniture when you start the tenancy, it is very difficult to deal with complaints that come in from the landlord when the tenancy comes to an end.
From 6 April 2007 all new shorthold tenancy agreements (i.e. most new private tenancies) will be subject to new regulations governing the retention of deposits by landlords on expiry of the lease.
The regulations are being introduced to provide a fairer system for settling disputes about the return of a deposit at the end of a tenancy. In the future, landlords will not be able to unilaterally retain the deposit and the means for settling disputes should become quicker and simpler.
With the new regulations, on receipt of the deposit from a tenant, the landlord must protect this money by using a tenancy deposit scheme. This must either be a custodial scheme or an insurance scheme.
Under a custodial scheme the landlord pays the deposit to the scheme, which will keep it until the end of the tenancy. Under an insurance scheme the landlord keeps the deposit but pays Insurance premiums to the scheme. This means that the deposit is insured if there is any dispute, and the scheme will repay the tenant the agreed amount directly.
The landlord is free to choose whichever scheme they want but must, within 14 days of receipt of the deposit, inform the tenant which scheme they are using and how the tenant can get the deposit back at the end of the tenancy and what happens if there is a dispute.
At the end of the tenancy, if landlord and tenant are in agreement on how much of the deposit should be returned, the landlord must pay the amount agreed within 10 days. If the deposit was held in a custodial scheme the tenant is also entitled to receive some interest on the deposit.
If the parties are not in agreement at the expiry of the lease, the landlord is entitled to retain that part which compensates them financially if they can show that the tenant has caused damage to the property (normal wear and tear excepted) or if some rent is due. If the tenant disagrees the dispute will automatically go to a free Alternative Dispute Resolution scheme or, in the event either party does not agree to this method of dispute resolution the matter will go to court.
Any landlord who does not protect tenants’ deposits and provide them with the required additional information within 14 days will, on application by the tenant, be required by the court to return it, or protect it in an approved scheme - and also to pay the tenant compensation to three times the value of the deposit paid. In these circumstances the landlord will also lose some of their rights with regard to recovery of possession.
If you are a landlord, when you want the tenant to leave the property there is certainly no reason why you should not informally ask the tenant to confirm that they are vacating on a specific date, but if they do not go when they say they will you cannot just throw them out on the streets. It is necessary to serve proper notices warning the tenant that you are going to take proceedings in the County Court if they do not vacate, and the form of this notice is set down in legislation.
We can assist you in serving the necessary notices in the right form at the right time so as to ensure as far as possible the tenants go when they should go.
Equally if you want to evict the tenant because of breaches of their tenancy obligations, we can assist you in dealing with the necessary procedures that have to be followed before a residential tenant can be evicted.
For further information please contact Les Durbin or Gillian Jones.