Here is a question to the Blog Clinic ‘Fast Track’ from Kayleigh who is a tenant.
I moved into a flat on 4th May 2017 as a replacement 3rd tenant. A new AST was issued in all 3 of our names and I had made it clear before I moved in that I would only be staying a year.
The deposit was correctly registered with TDS. The AST had an end date of 3rd May 2018.
In February this year we all notified the letting agents that I would be leaving and that the 2 other tenants wished to remain in the flat, with one of the tenant’s sisters replacing me as 3rd tenant.
The problem is that the letting agents are saying that the ingoing tenant has to pay me my part of the deposit and that I have to sign a ‘Tenancy Deposit Swap Agreement’ and a ‘Tenancy Swap Agreement’ or they will not issue a new AST.
The ingoing tenant is refusing to pay me the deposit (I believe she has financial problems) and the letting agents are saying that I am legally liable for the rent until I sign the ‘Agreements’.
I cannot raise a Deposit Dispute with TDS as all 3 tenants must be in agreement and we are not – in fact it suits them very well to do nothing.
I have tried reasoning with the agents, citing information found on your website but they just keep saying that I am wrong. I have pointed out that the locks were changed on the day I moved out (they then told me to come and pick new keys up) and that they had already written to us all stating ‘ Your tenancy expires on 3rd May, if you wish to renew…..'(which clarifies that the tenancy had an end date) but they are saying that because 2 tenants are staying it is a ‘Tenancy Swap’ and no new AST has to be issued and that the tenancy becomes periodic after the end date.
In short, I just want my deposit back. Where do I stand and what do I do?
I cannot reason with either the agents or the other tenants and I cannot be held liable for the rent, surely?
I am a nurse, have very little money and work 12 hour shifts….the stress of this situation is immense and I really need your advice please.
Answer
I think there are two main issues here:
- Your liability under the tenancy and
- Recovery of your share of the deposit
Let’s take a look at the first issue first.
Your liability under the tenancy
You were a joint tenant and as such, as you will know, you cannot end your liability under the tenancy during the fixed term.
However the fixed term has now ended, and it looks as if no new tenancy agreement has been signed. Therefore, any tenancy will now be a new ‘periodic’ tenancy, probably created under the provisions of s5 of the Housing Act 1988 (or alternatively section 54(2) of the Law of Property Act 1925), which if rent was paid monthly, will be running from month to month.
However, the question is – are you still a tenant?
In view of what you have said – in particular:
- The fact that you notified them at the start that you were only going to stay for one year,
- The notice that was sent to the agents in February telling them that you would not be staying,
- The fact that the agents changed the locks and
- Wrote to you specifically saying that the tenancy has ended,
I think it is most unlikely that you are still a tenant and liable for the rent.
I do not agree that the ending of the tenancy is conditional upon you signing a ‘tenancy swap agreement’. A ‘tenant swap’ is not legally possible – because of the way that land law ‘works’. The only way that tenants can be changed is by bringing one tenancy to an end and starting a new one with the different tenants.
The Deposit
I understand from talking to people at TDS in the past that it is possible for individual tenants deposits to be protected separately. This would have been a better option in a situation where the agents knew from the start that you were going to be leaving after a year and the other tenants were going to be staying. However, this was clearly not done.
How deposits should be dealt with at the end of a tenancy
If the tenancy has now ended and any ongoing tenancy will consist of at least one new tenant, this should trigger action with the deposit.
Ideally, the property should be re-inventoried and any damage deducted from the deposit (as it is unfair for the incoming tenant to be held responsible for damage done before her occupation).
The balance should be then divided between the tenants with your share being paid to you and the balance retained against the deposit for the new tenancy. With any balance to make up the amount needed for the new tenancy being paid by the new and remaining tenants.
About withholding the deposit
I understand from TDS that they do not object to incoming and outgoing tenants sorting out the payment of the deposit among themselves. However, I don’t think that the failure to pay into a new deposit with new tenants should justify withholding the deposit from the outgoing tenants, where that former tenancy has ended.
If the new tenancy had completely new tenants, no-one would consider it right to withhold the deposit from the outgoing tenants because the new incoming tenants had not paid their deposit. So why should this be justified where the new tenancy consists of one or more tenants from the preceding tenancy?
As your share of the deposit has not been protected separately then you are probably right that you cannot bring any claim against TDS on your own, if the other tenants do not support you. Although you may want to speak to TDS about this on their helpline if you have not already done so.
Bringing a claim against the agents
However, if you cannot do anything about your deposit directly, what you can do is bring a complaint against your agents’ Property Redress Scheme. All agents must be a member of a scheme and they are required to state which scheme they belong to on their headed paper, website, emails and so on.
Once you know what the agent’s scheme is, visit the scheme website where you will find details on how you can bring a complaint against the agent.
The schemes all have the power to award compensation and I would expect them to award you compensation for at least your share of the deposit (less a proportionate part of any allowable deductions) and maybe an extra sum for your distress and inconvenience.
In your case, the agents knew from the very beginning that this situation was going to arise as you made it clear that you would be leaving after one year. They were also notified about this in February. As they accepted this (at least initially) by changing the locks of the property and telling you the tenancy was at an end, it follows that you should be refunded your share of the deposit.
I think you should stand a good chance of succeeding in a claim against them.
Provided she moved out before the end of the last day of the fixed term, then no statutory periodic tenancy arose (IMO), as Tessa says.
This is because S5 Housing Act 1988 requires that the “tenant” agrees to a spt arising and that the tenant for the spt be the same as the tenant for the initial term, and S45 (I think) says “tenant” means all the individuals together.
Standard approach to agreeing to a spt is not moving out.
By moving out the individual has clearly indicated her wish not to enter a spt and that is supported by notice given at the start of the term and subsequently by giving notice recently.
Note that the notice is NOT notice to end the initial tenancy, but is notice to end the contract at the end of the agreed term and notice of intent not to enter into a spt.
This agent appears to have put itself (or it’s client landlord) in a awkward position.
By accepting rent from others after the end of the tenancy they would spear to have created a new tenancy with undocumented terms and a minimum of 6 months, and possibly not handled deposit appropriately for the new tenancy.
If the tenancy is joint and several then one tennant giving notice gives notice for all, did she give official notice to quit in writing? The onus then falls onto the remaining tenants to either have a new agreement for the two of them or a new agreement with the third person. We will not allow a new agreement to be signed until the leaving tenant confirms that they have received their share of the deposit from the remaining tenants less any agreed deductions between them for any damage the outgoing tenant may have caused that the remaining tenants will be liable for whenever their tenancy ultimately ends. We do not do a new inventory as all tenants and their possessions would have to be removed from the property in order to do so. If the payment to the outgoing tenant of the share of the deposit due back to them is not resolved we serve notice to all tenants under the existing agreement and once all tenants have left the deposit is resolved in the normal way – however, serving notice usually has the effect of getting the remaining tenants resolve the deposit matter.
This is not about ending a tenancy; it is about not agreeing to be party to a SPT once the original tenancy period has come to an end.
This is clearly the agent just trying to make an easy life for themselves! The tenancy has clearly ended and the agent, the landlord or the 2 remaining tenants (depending on their agreement) should have found a replacement tenant to replace Kayleigh for the new tenancy. The landlord has responsibility to Kayleigh to return her deposit at the end of the day (even if she gave it to the agency) so she should pursue the landlord for return of her deposit!