Here is a blog clinic question from James (not his real name) regarding his student daugher’s accommodation:
While I was away on holiday with my wife, my daughter and her friend found a flat they liked to share for their second year at University.
They both signed an agreement with the agent (though nothing was mentioned about a tenancy deposit scheme which I am only now aware off) along with £700 each for the deposit.
However a couple of weeks later the agent called my daughter and said over the phone the agreement needed to be superseded by one which allowed the landlord to be the one managing the property. My daughter’s friend went in and signed her section and my daughter was about to when her friend decided to drop out of University.
My daughter has now had to reconsider her situation and she cannot take the flat. The new contract is not signed by my daughter and the agent is refusing to give her friend or her a copy of the either the old and new agreements claiming that it first needs to be signed by the two of them before they allow them copies.
Surely the new agreement voids the previous agreement? Also why cannot my daughter’s friend obtain a copy a document she has signed?
Please could you advise how likely is my daughter is to get her deposit as they are saying there will be no refund and how we go about resolving this situation?
I do feel a bit sorry, I must say, for the landlord of this property, as I suspect he may have lost opportunities to let this property to other students.
Had the original agreement remained, then I think your daughter would have been in a difficult position as both she and her friend would have been bound by the terms of the agreement and liable for the rent (on a month by month basis).
However luckily for your daughter (in a way) the agent asked for a new agreement to be signed, and unluckily for your daughter’s friend she signed it. So she is in a much worse position as she is technically liable for the whole rent on her own for the year. The fact that she has decided not to go to University will not change this – this after all its not the landlords fault.
However you are quite right, the new agreement will void the old agreement and luckily for your daughter she has not signed it. So she is not bound by it and will not be liable for the rent.
However the landlord has been messed around. She was supposed to sign the agreement and she had after all agreed to take the flat – evidenced by her signature of the original agreement.
So my feeling is that the landlord is probably entitled to all or at least part of the deposit. It is mainly to compensate landlords for being messed around by tenants changing their minds that deposits are taken in the first place.
Probably the best thing for your daughter to do is to find another flat mate and take the flat. Otherwise I think she may have to put this one down to experience.
Unless maybe she is able to show that the landlord found another tenant really quickly and suffered no loss. But she would probably have to bring a county court claim to recover the money, and there is no guarantee that she would be sucessful.
So far as providing a copy of the agreement is concerned, your daughter is entitled to see and have a copy of the new tenancy before she signs it so she can take legal advice on what it says. If she were to bring proceedings to recover the deposit money she would be entitled to ask for a copy as part of the procedure.
I think there are two key points being missed here Tessa.
The first is that under Consumer Law no deposit can ever be made 100% non refundable unless you have incredibly watertight wording in the tenancy agreement or any paperwork relating to it. Even then the OFT would not like it and strike out any such clause.
A deposit is part payment of a contract made in contemplation of specific performance – that did not happen here – at least not with the second agreement.
The second p[oint is the second agreement replacing the first. How can that be when it is incomplete?
Anyway the big point you have not commented on is the tenancy deposit. Agent/Landlord wants to keep it do they – when all they can keep is reasonable costs incurred such as referencing. If the deposit has not been protected and PI has not been issued I’d suggest the tenant either suggests everyone forgets about it and gets on with their lives or else threatens to bring a Part 8 Claim for the deposit and x3 as a penalty.
I don’t think the second agreement was incomplete. It was just that it was only signed by the one person (rather than two). So just that person will be liable. Or at least that is arguable.
So far as the tenancy deposit is concerned, it depends what sort of deposit it was.
If it was a deposit to reserve the property for the tenant and protect the landlord from the tenant not going ahead (which is what I sort of assumed) then these are the very circumstances it was intended for.
So far as any money paid by James’ daughter is concerned that was not in respect of any actual tenancy as presumably the first one never started and she never signed the second agreement. The tenancy deposit regulations only ‘bite’ if there is actually an AST there to hang it on.
Not so sure about your last sentence Tessa – that takes us right back to the whole argument of rent or deposit. If money is paid as a deposit it must be protected withing 30 days of receipt regardless of when the tenancy is intended to start – or indeed if it ever does.
The whole point is the purpose for which the money is paid. The item clearly states each of the two tenants (by the sound of it) paid a £700 dep[osit. Seems pretty clear to me.
No, its not rent or deposit. It was clearly a deposit. But it may not have been a tenancy deposit for the purpose of the regs.
If she did not sign the tenancy then so far as she is concerned there is no tenancy.
The rent/deposit situation is when you have a tenancy. Here (so far as she is concerned) there is no tenancy.
Not all deposits are subject to the regs. You can have a holding deposit which is all about pre tenancy risk. It really depends on what happened at the time and we don’t know the full picture.
Tessa
Far as I am aware jury is still very much out on holding deposits as they depend on several factors as to whether or not they are a deposit.
Can you quote and Case Law from a Court of Record that confirms a holding deposit – in effect a reservation fee – is not a deposit for the TDP Regs?
I don’t know of a case offhand – does anyone else?
if tenant refuses to sign the new agreement but threatens to take up the tenancy then where does that leave the landlord?
Well if the new agreement had not been signed by anyone, the landlord would be bound by the previous agreement that the tenants HAD signed.
The tenant does not have to sign a new agreement just because the landlord has made a mistake.
In this case though someone DID sign the new agreement.
Assuming the agent hasn’t dated the new agreement – which I doubt they have if it hasn’t been signed by both parties and exchanged – then technically it hasn’t been executed and the old one still stands anyway.
Here I have to agree on reflection with Tessa – arguably if a subsequent tenancy agreement in joint names has been signed by one or more of the joint tenants it applies as against them individually at least and probably replaces the earlier one.
Have had this situation frequently where one of joint tenants was ‘missing’ at the original commencement date and signing usually a student elsewhere in the UK or a spouse that was still abroad. Have had it legally confirmed to me many years ago that it is in order to proceed and get the second signature that is missing from the document at TCD at a later date as long as it is within a week or so.This is because the argument fgoes doing so is a benefit to the tenants.
Where I do disagree with Tessa is this holding fee issue and it somehow having some separate connotation and definition for TDP purposes. In my view it does not. The deposit definition is very widely drawn in HA 2004 and in my view deliberatly so in order to stop what is patently a deposit by any other name from somehow escaping the intended TDP rigours just because it is called something else.
What matters is what the money is for either when paid or at any later date. The vast majority of monies paid other than pure tenant application fees and specifically rent are almost certainly deposits unless and until a Court of Record says otherwise.
To proceed on any other basis post LA 2011 having closed off all offence escape routes is a risk just not woirth taking even if inconvenient e.g. for student Landlords and Agents