Jeremy Ward - Tenancy Law – Tenancy Deposit Scheme

Pre Tenancy Agreement

4/19/2010

Pre Tenancy Agreement

Whether you have been a landlord since time began or have just started out, a Pre Tenancy Agreement will help you secure a dependable tenant. A Pre Tenancy Agreement enables the landlord to make an informed decision regarding a prospective tenant.

Online you will see a number of different types of tenancy agreement available. It is imperative that you undertake research to ensure you use the right type of tenancy agreement for your situation, and as appropriate to your needs.

In essence, the Pre Tenancy Agreement temporarily commits a prospective tenant to the landlords property, whereby the landlord agrees to hold the property for that tenant on receipt of the appropriate deposit money and subject to satisfactory references. The Agreement effectively reserves the tenancy so that the landlord does not show the property to others by withdrawing it from the open rental market.

This type of agreement is often regarded as invaluable to landlords as a landlord can offer the property or room before the signing of an actual tenancy agreement. Provided the tenant accepts the use of a Pre Tenancy Agreement by the landlord, if either party falls foul of the Pre tenancy Agreement, neither is stuck in the tenancy agreement. The landlord can put the property straight back on the market and take any administrative fees or similar from the deposit provided by the prospective tenant, and return the remainder to that tenant whereby each party shall be free to walk away and continue as though they had not entered into the pre-tenancy agreement. This Agreement offers each party protection, as it allows the landlord a get out should the tenant default on paying a deposit or attaining satisfactory references, and the tenant may leave if they simply change their mind, and receive their deposit back.

The Pre Tenancy Agreement will list the details of the property, such as its address and the term of the tenancy, contact details and deposit required. It will state a deadline that the references ought to be received by and that the tenancy is subject to those references being approved and accepted by the landlord.

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Tenancy Law – Tenancy Deposit Scheme

2/18/2010

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The Tenancy Deposit Scheme has been applied under the Housing Act 2004 and was introduced on the 6th of April 2007. The main aim the scheme was to improve standards across multiple tenancy locations and to improve on safety legislation. The Tenancy Deposit Scheme is mandatory for all landlords and letting agents based in England and Wales that hold tenancy deposits that have been taken from a tenant that are under the Assured Short hold Tenancy Agreement (AST) after the introduction date.

The Tenancy Deposit Scheme is a like an insurance policy for the tenant in that the scheme protect the tenants deposit securely with the added satisfaction of knowing that a resolution process can be applied upon any disputes made. This came around due to clients disputing that their deposit had been taken away under unfair conditions. The three main conditions that the Tenancy Deposit scheme aims to cover are

1.       Protect the deposit throughout the term of the tenancy in accordance with the tenancy scheme.

2.       Prompt return of the deposit at the end of the tenancy contract when there is no dispute required.

3.       Deal with any disputes at the end of the tenancy agreement. This will be dealt with by the Independent Complaints Examiner. This will ensure that the dispute is handles fairly, quickly and is a smooth process for both parties involved

The way the scheme works on principal is the same across all schemes. Tenants will pay the deposit to the landlord. The landlord will then hold it be aware that letting agents by law are no longer able to hold deposit. The landlord then has the responsibility of informing the schemes administrating body so that protection will be applied to the tenant’s deposit. When the tenancy contract ends both the landlord and the tenant will decide how the deposit will be handled. If the tenant has any disputes over the deposit the tenant is required to complain the schemes administrating body which will inform the landlord who will in turn have to reply within a set period of time. The dispute is then handles by the scheme administrator until resolution has occurred. The money in dispute will be applied to both parties fairly according to the agreements in place. If a settlement can’t be agreed after this process then the tenant will need to apply for a court order. The security deposit is not required to be given to the Tenancy Deposit Scheme handlers.

If a landlord or letting agent does not apply a Tenancy Deposit Scheme they are breaking the law. If they do not comply with this scheme then they can be taken to court and fines may be imposed.

There are three main places to go and get cover for the protection of tenancy deposits. They are

1.       www.td.gb.com also known as The Tenancy Deposit Scheme.

2.       www.depositprotection.com also known as the Deposit Protection Service.

3.       www.mydeposits.co.uk also known as Tenancy Deposit Solution Ltd.

As with most schemes there are costs involved. The initial signing is free no matter what scheme you may choose to use. On top of that you will be required to pay a yearly fee. These costs vary and do change over time.

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2/18/2010

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Pre Tenancy Agreement

Tenancy Law – Tenancy Deposit Scheme

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