Here is a question to the blog clinic from Paul who is a landlord
I allowed a friend of a friend to stay in my flat whilst I was overseas – initially this was to be for only a few months but ended up being nearly a year. In the spirit of things the ‘agreement’ was merely documented in emails and no ASTA was ever drawn up or requested by either party.
The tenant paid me a month’s rent in advance and a ‘deposit’ amount – he is now trying to sue me for not having lodged the deposit in a TDS; my understanding was that, because an ASTA was not in place, I was not under any obligation to protect the deposit.
Please could you clarify the situation. Thank you
So much for friendship! You do have to be REALLY careful about renting out your property to friends on an informal basis. It is often a recipe for disaster.
Under the Law of Property Act 1925 s54(2) if someone moves into a property and starts paying rent, a tenancy is created automatically. In the vast majority of cases, that tenancy will be an assured shorthold tenancy (AST).
It is NOT necessary to have a written document to create a tenancy.
If the tenancy is an AST and a deposit is paid – then the deposit protection rules will apply and the landlord will be required to protect the deposit with a government-authorised tenancy deposit scheme and serve the prescribed information within 30 days of payment of the deposit.
That is almost certainly the situation here. Sorry!
Sometimes when a property is let on an informal basis a court will decide that there was ‘no intention to create legal relations’ – ie no tenancy. However I suspect that will not be the case here. Evidence against is the fact that the tenant obviously did not think so in view of the current claim.
The moral of this story? ALWAYS deal with the paperwork properly and comply with all the relevant regulations – whoever you let to.