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One in one out deposit protection


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Hi,

 

We have a property which is rented to four individuals on one AST.  The initial 6mnths are up and the contract has now moved on to a monthly rolling.  One of the tenants would like to move out and they have sourced a replacement tenant. The property is managed by an agent who is carrying out referencing and has agreed that a new 6mnth AST needs to be signed by all parties, so far so good.  

 

The agent stated they do not carry out an inspection when a tenant swap takes place as they expect any damage/cleaning/negligence to be negotiated between the vacating tenant and the new tenant.  I'm a little concerned about this for two reasons;

 

1. When the tenants decide to end the tenancy and move on we only have an inventory from the first AST which will make it hard to hold the new tenant responsible for any damage.

 

2.  Is it ok for the outgoing and incoming tenants to swap deposits between them or is best practice to refund the deposit and protect the new deposit and deliver new prescribed information?

 

If anyone has dealt with a similar situation or has any opinion on the best way to operate it would be appreciated,

 

thanks, Dave

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Dave,

 

How often is your agent contracted to carry out mid term inspections?  We normally carry out 4 in the first year as part of our contract with landlords so the 6 month point would be a natural point to inspect a property which could be easily amended to be a mini check-out inspection to confirm that the departing tenant had indeed left the property in good fettle and the remainder of the tenants were looking after the property.

I would get the new tenant to sign a statement that they are happy with taking on the tenancy with the inventory as stated at the start and get them to state any discrepancies that might have an impact on the final move out and it might be worth getting the remaining tenants to sign that they are taking responsibility with the departing tenant for any significant issues and then get the deposit charge aportioned.  Hopefully this is unlikely and not take time of the agent.  

It would be considerably less work than a full move out/move in and unnecessary.

 

With regard to deposits - best practice probably would be to start afresh but depending on the deposit system they use it may not need money actually moving.  If the scheme that the agent uses a non-custodial scheme then the money can stay put and hte new money handed over to the outgoing tenant (minus any agreed deductions) and a new certificate raised - again not a major amount of work.  If their scheme is custodial it is a little trickier but contacting the DPS they may have a system for amending deposit names.  Some agencies only mention a lead tenant on the certificate and the others are not mentioned so it may be possible to have an informal signed agreement between the parties which again - at the end of the day should work.

 

Try and find a pragmatic solution that covers the bases, without being an onerous administrative burden.  My only concern is that your agent does not sound to be pragmatic, co-operative or creative and is looking to do as little as possible.  Maybe a change of agent is required? 

 

Good luck

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  • 3 months later...

I completely agree with you Dave!  This is an entirely new tenancy and firstly it is a legal requirement that the deposit be re-protected and prescribed information etc be reserved.  

 

If no signed inventory and photographs of the condition on the commencement of this specific tenancy exist it will be impossible for you to make any claims against the protected deposit to compensate you for any damage. In the event that the Lead Tenant does not agree to any claimed deductions you will have literally no recourse other than for rent arrears.

 

Kate

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