Change of Landlord when tenants are stil in property

Landlord Discussion Legal
41

@Tim43

pretty sure Openrent won’t transfer deposits to some other scheme - dealing with the deposit themselves is part of the deal when you use OR to create the tenancy

New LL (wife).can simply nominate current LL as an agent to deal with deposit for them and there’s no action needed, don’t think there’s any RRA breach if they do that? What would the breach be if they do that?

Re burdens- if LL proceeds with new tenancy they can tell tenants to ignore OR chasing and pay new 1st month rent on date due and pay new security deposit only when old security deposit has been received - these don’t need to be paid upfront at all. The only cash flow issue for tenant is providing the 1 week holding deposit and again this could be avoided or minimised by accepting the application for new tenancy/holding deposit and doing the new contract on the new contract 1st month due date (or very shortly before). (If need be the holding deposit can be paid in OR by a third party so LL could pay it and get back from tenants later by them paying the normal full monthly payment amount on the due date for the new contract)

Doubt any new vetting for RGI needed when same tenants continue on same terms. Why would an insurer need any new vetting?

It’s no more or less paperwork than when a LL moves tenants onto (or off) the Openrent contract- when a new contract would be normal.

Agree it’s not ideal that OR basically don’t support change of landlord with no new tenancy contract despite these being possible legally with s3 and s48 and deeds of variation - but nobody is forced to use OR, and there are some benefits to tenants from using OR too (deposit properly put in a scheme, £ handed to LL 10days after 1st payment due date to protect against rogue LLs, a standard contract)

Best

42

In order for a letting agent to qualify in place of the landlord on the deposit Prescribed Information, they would need to insert their details in the relevant section of the form, including a phone number and email address and sign the form at the bottom. Has Openrent done this?

I also believe that the person/company is signing to say that they are the point of contact for queries or actions regarding the deposit. Are Openrent offering that?

43

Ive just taken another look at The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 and I can see that its been amended since I last looked at it. The amendments do indeed seem to allow letting agents, (here called “initial agents”) to be named in place of the landlord and to sign as such without necessarily managing the tenancy on the landlords behalf. There are still some hoops to jump through though, so I would be interested in whether this is something that Openrent do in relation to the deposit and prescribed information if anyone has a copy of one.

44

@David122 @David240 I have added a redacted version of copy of deposit certificate I had received at the time of setting up tenancy agreement with existing tenants.

Can I check when people are saying new LL (wife) can simply nominate current LL as an agent to deal with deposit for them - then is there a written confirmation that needs to be served? I am concerned that the deposit certificate will still have my name as the landlord unless there is some written evidence that overwrites that?

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45

Thanks, but its the entry under ‘landlord’ that’s of most interest. Was this the actual landlord or Openrent?

46

@David122 I can’t say if this is universal but the latest deposit certificate I have lists myself as LL not Openrent.

Bedt

47

Yes and likewise for me.

48

@Jitin @David122

Here is the advice on this from Open Rent

"Does the account have to be in the same name?

In short - no, there is no legal requirement for the name on the landlord’s account with the deposit agency (e.g. MyDeposits) to be the same as the landlord’s name on the contract.

Housing Act 2004, chapter 4, section 212 (9a) states:
“references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies”.

So, if a landlord asked a third party (who could be an individual or an agent) to deal with a deposit on their behalf, that person would take on the obligations of the landlord.

However, the landlord must provide their name and details to tenants

Section 213 (5) and (6) states that the landlord must provide details of the deposit scheme used and other ‘prescribed information’ which the landlord must supply and which provide the tenant with information about how their deposit will be treated and how it can be reclaimed.

The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 gives further information on this prescribed information and specifies that it should include “the name, address, telephone number, and any e-mail address or fax number of the landlord”. However, it does not specify anything about the name on the deposit account.

So, the legislation requires that landlords must provide their name to tenants (which in any case is required in any demand for rent) along with other details, but deposit protection is an obligation which other parties can do on behalf of the landlord; the legislation does not state that the deposit must be registered in the landlord’s name as long as the prescribed information is provided correctly otherwise.

Information on this site is by way of general guidance only and may not apply in your particular circumstances. You should not act or refrain from acting upon information on this site without seeking independent legal advice."

https://help.openrent.co.uk/hc/en-gb/articles/360007105412-Does-my-deposit-protection-scheme-account-have-to-be-in-the-same-name-as-shown-on-the-AST

-I would think that this means so long as it is made clear that the new LL is @Jitin 's wife, and that @Jitin is acting on his wife’s behalf re the deposit, then all should be ok. I would suggest that as new LL @Jitin 's wife would write to tenants introducing herself, reassuring tenants nothing else changing and indicating @Jitin 's role.

But you could certainly get legal advice to confirm what OR advise is correct…

Best

49

Yes, I mentioned the option of the original landlord continuing to act as landlord after the ownership is transferred in my earlier post, but I think it may be too late for Jitin now as the option for him to remain as landlord may now have gone as he’s served a s3/s48 notice for change of landlord. He could in theory act as Agent, but would have to fulfil the agent criteria, such as registering with one of the Redress schemes etc.

However, the problem remains for any landlord selling with tenants in situ.

I think that OR text about s212(9a) is also now out of date as the latest version of The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 seems to have disapplied it. The only option now for the section on the Prescribed Information form naming the landlord seems to be either the actual landlord or the initial agent if they set up the deposit in the first place. As it appears from the examples you and Jitin have quoted that Openrent don’t routinely name themselves in this section, that means it has to be the actual landlord.

I would suggest that anyone stuck in this position go back to Openrent with the information above and demand they resolve the situation. Failing that, make a formal complaint to whichever redress scheme they’re registered with.

50

@David122 but what redress scheme is going to punish OR for their commercial choice not to offer a particular service?

Best

51

Just FYI, that doesn’t necessitate a change of landlord. You can if you want, but there’s no reason why you can’t continue to be landlord while your wife owns the property.

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52

As it happens I am both a LL myself AND the father of one of Jitin’s tenants (lol). So I complained to Openrent about this, out of both personal and professional interest.

The initial response was the standard template fob-off from the web page that others have quoted previously. However, on escalating the complaint, they have replied as follow:-

Hi Tim,

Thanks for getting in touch,

We have passed this feedback onto the team who are now looking in to this case. We’ve also reached out to the landlord directly regarding this change of landlord to support.

If this is a case of just transferring the deposit to the landlord we can can action this for them.

Kind regards,

So, with the caveat that this is still early days, Openrent at least seem to be trying to resolve the matter and have indicated that a deposit return could be actioned.

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How to change tenancy deposit scheme to new owner
53

Its not just a service choice their system could potentially leave a landlord who has bought a property with tenants in situ with no way to make the deposit legal other than to refund it completely.

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54

Good point. And the deposit scheme generally won’t refund the deposit except at end of tenancy.

55

For completeness, the response I got back from OR is screenshotted below - don’t think it’s any different from what we’ve been previously discussing.

Given we have to work within OR’s limitations or services on offer, for clarity, can I confirm that now the sections 3 and 48 been served by my wife as the new LL, can my wife name me as her agent on her behalf holding the deposit until end of tenancy? If yes, then how to go about it - an email between us and then me informing the existing tenants - again via email, I assume?

If no, then have to go through ending existing and setting up a new agreement. I am assuming in this case, LL doesn’t refund deposits until new contracts are signed by all parties? Any other logistical complications envisaged?

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56

@Jitin

The reply to @Tim43 indicates OR will be reaching out to you and can change the LL name?

Think your wife may need to be set up on OR system as a LL so can be transferred to her/her name used on deposit account but otherwise OR seem to be offering to do what you want/need?

Good luck

How to change tenancy deposit scheme to new owner
57

Very poor response from OR as the tenancy would not necessarily be coming to an end.

I would not recommend starting a new tenancy. I would suggest refunding the deposit if you yhink the tenant would be willing to repay it.

58

@David240 my read of OR’s response is they can’t transfer it unless current tenancy ends.

@David122 yes agreed, not a great response and don’t think I can transfer deposit to tenant without going through the ‘end of tenancy’ process with OR - which again means ending current tenancy.

I take my first option of my wife suggesting me as her agent and us informing existing tenants is going to suffice in this situation? So tenancy would need to be ended?

Issue with letting agent on landlord's death
59

@Jitin

Tbh I still don’t understand why ORs response to.@tim43

saying they’ll do the name change " if this is a case to just transferring to the landlord we can action" and are reaching out to you isn’t good enough (agree the standardized reply no good) but perhaps I’m missing something

  1. Regarding

I’ll leave @David122 to comment on what if any reqs you need to meet to be considered an agent and whether anyone is going to care or try to Sanction you for not having the deposit account listing your wife as the LL. It’s the tenants £. So long as they get it back in part or fully v through a fair independent process at end of tenancy and its protected in a govt approved scheme meanwhile, who is going to complain?

Even if the updates to regulations that @David122 mention mean that the previous OR advice that it doesn’t matter is no longer correct, I’m not sure what any consequences would be in practice or how any enforcement authorities would even find out. You have the evidence of both you and @Tim43 trying to get OR to fix it as well, so without tenant agreeing to end tenancy and get deposit back and start a new one, im not sure what more a court can expect you to do.

Perhaps you can exceptionally persuade OR to get mydeposits simply to return the deposit to T without OR ending the tenancy. And then your wife takes a deposit from T and wife puts it in one of the 3 govt approved schemes herself

Best

60

To be an agent, you would need to register with an agents redress scheme and maybe have insurance and a client money protection account of you collect the rent.

I think this needs a few formal complaints to Openrent before they do anything about this.

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