We have three friends sharing a house on a single AST which is just coming to the end of the fixed term. Tenant 3 wants to move out and Tenants 1 & 2 are staying put, and they also want to bring in a new tenant (4) to take the third bedroom, which we're fine with as long as she passes the referencing checks - though time is somewhat tight as the contract needs to start on 1st Aug and I haven't yet had her application. I'll be asking the remaining two to sign a new contract regardless of whether there's a third name on it or not.

What do I have to do regarding the deposit? It's with the DPS, and the tenant in whose name it's registered isn't moving out, so do I actually have to go through the motions of returning it and then getting it back again to re-protect, or can I just re-issue the DPS paperwork with Tenant 3's details removed and, if applicable, Tenant 4's added, and leave the tenants to sort their shares out among themselves?

Of course, this is all assuming that there won't be any deductions!

Check with the specific scheme as they might have a policy.

Technically the old tenancy is coming to an end. A new tenancy is being started. Is there a really good reason not to terminate the old deposit protection and then create a fresh one?

My advice would be to start again from afresh.

Take an inventory of the property when tenant 3 moves out, so that you can determine whether that tenancy created any damage that warrant deductions. You don't want the remaining tenants to say "Oh, it was tenant three that broke that" when tenant 3 is long gone.

You can then use this inventory as the benchmark for the start of the new tenancy.

Why not take the opportunity to see if you can increase the rent a little (if you have not done a rental increase in the last year)?

Most of the schemes have a helpline you can call, so it might be worth checking with them, as John says.

Please report back here what they suggested so that we can all learn!

(26-07-2012 08:23 AM)vanessa warwick Wrote:  My advice would be to start again from afresh.

Take an inventory of the property when tenant 3 moves out, so that you can determine whether that tenancy created any damage that warrant deductions. You don't want the remaining tenants to say "Oh, it was tenant three that broke that" when tenant 3 is long gone.

You can then use this inventory as the benchmark for the start of the new tenancy.

Yes, we're doing that - it was just the deposit protection that I wasn't sure how to handle.

Quote:Why not take the opportunity to see if you can increase the rent a little (if you have not done a rental increase in the last year)?

They've only been in the house for 6 months so I think it's a bit early to be pushing the rent up. Having said that, with three of them sharing the rent it's very cheap - significantly less than the LHA shared room rate - so I think we will put it up a bit when this 6-month term is up.

Quote:Most of the schemes have a helpline you can call, so it might be worth checking with them, as John says.

Please report back here what they suggested so that we can all learn!

Yes, I'll try that.

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Just tried the DPS's "virtual assistant" and it told me:

Quote:If the Lead Tenant is leaving the property and is being replaced by a new Lead Tenant, the JDR process must be followed. A new Deposit will then need to be secured in respect of the new tenancy details.

... which suggests that, as the Lead Tenant is staying put, I don't need to do anything.

Also got:

Quote:The Lead Tenant is the individual that acts on behalf of all the other Tenants when dealing with us. The Lead Tenant can make enquiries and start the JDR process. They can also authorise or validate a Deposit repayment that has been started by the Agent/Landlord. The Lead Tenant must ensure that all Tenants and any third party receive the appropriate share of any deposit monies that are to be repaid to them.

which suggests the same thing.

However, I called the helpline and eventually got through to someone who told me that, unless the tenants are happy to have the deposit left with the old tenants' details, I'll have to return and then re-protect it.; if the tenants are happy to leave things as they stand then I don't need to do anything.
But actually, as far as I can tell/remember, they don't actually HAVE the details for Tenants 2 & 3 - certainly only the Lead Tenant's details are showing up when I look at the details on the website. The other tenants' details were on the paperwork that I had to issue, though, so I think it's probably wise to issue an updated version of that, possibly with a note to say that the DPS don't have the new tenant's details on record and may or may not have the departing one's.

Hi
I've dealt with this issue several times
It will not be easy to take an inventory of the property if the 2 tenants are still in occupation.
so you draw up an adendum to the AST for the existing and new tenants to sign, saying something along the lines of:-
existing tenants agree with the condition of the property new tenant agrees to accept the property in its current condition.

The vacating tenant is returned his % of the deposit but the NEW tenant moving in.
The deposit is against the tenancy not the individuals.

i'm not saying this is fool proof but so far touch wood it has worked for all my shared tenancies

(26-07-2012 03:51 PM)julie_ford Wrote:  Hi
I've dealt with this issue several times
It will not be easy to take an inventory of the property if the 2 tenants are still in occupation.
so you draw up an adendum to the AST for the existing and new tenants to sign, saying something along the lines of:-
existing tenants agree with the condition of the property new tenant agrees to accept the property in its current condition.

So the existing & new tenants are saying that they're happy for any damage that's not immediately obvious now, to be attributed to the new tenancy? Sounds like a sensible approach, and should encourage the remaining tenants to declare any damage that otherwise wouldn't be spotted until their departure.

Quote:The vacating tenant is returned his % of the deposit but the NEW tenant moving in.

Should the "but" have been "by"? That's how I think we're going to work it - the tenants have already said that's what they intend to do.

Hello Julie,

Lovely to see someone of your experience and sharing nature here. Welcome to PT!

(26-07-2012 03:51 PM)julie_ford Wrote:  Hi
I've dealt with this issue several times
It will not be easy to take an inventory of the property if the 2 tenants are still in occupation.
so you draw up an adendum to the AST for the existing and new tenants to sign, saying something along the lines of:-
existing tenants agree with the condition of the property new tenant agrees to accept the property in its current condition.

The vacating tenant is returned his % of the deposit but the NEW tenant moving in.
The deposit is against the tenancy not the individuals.

i'm not saying this is fool proof but so far touch wood it has worked for all my shared tenancies

Julie,

Welcome to PT.

I accept that you have done what you have shared above. Has it been tested in a disputed tenancy?

If it has not been formally tested in a dispute, I suspect the language would leave you in a tough position. Maybe it would work out fine as the lead tenant has not changed and the claim is sort of against them.

I see 2 options:

1) Present new group of tenants with original inventory to see if 1, 2 & 4 are willing to accept any issues created by 1, 2 & 3.

2) Instead of creating a new tenancy, assign the current one from "1, 2 & 3" to "1, 2 & 4". That way it is the same tenancy so the curent deposit protection remains valid and the new tenants deposit / departing tenants deposit is an issue for the 2 of them to sort out.

The 'proper' way of doing it (returning to 1st tenants and then taking new deposit off new tenants) is workable with TDS/My Deposits but is impractical and open to abuse with DPS.

(01-08-2012 03:02 PM)djr Wrote:  The 'proper' way of doing it (returning to 1st tenants and then taking new deposit off new tenants) is workable with TDS/My Deposits but is impractical and open to abuse with DPS.

Just so I am clear...

When you say it is workable with My Deposits, is that because you are buying an insurance policy for the new tenancy while the old policy terminates with the old tenancy? In other words, it is workable because My Deposits closes one contract and then charges the landlord for a new policy as if the two transactions have no connection to each other.

Is that what you mean?