a trading name and not a legal entity. •    There is some legal authority for the proposition that the relationships are mutually exclusive; i.e. This case highlights the need to scrutinise replies to s.16 Requests; those replies identified the person managing the HMOs by a trading name of a group of companies; that trading name had no legal identity. In relation to the rent CEL received on behalf of HPL Camden argued that this was sufficient  to make CEL a person managing the HMOs for the whole of the term of the tenancies and as the offences had occurred during those 12-month terms CEL was guilty of the offences. Similarly, under a transaction for a lease, the security deposit amount can be paid to an appointed third party as stakeholder who will hold the monies until the expiry or termination of the tenancy when the monies are then returned to the tenant less any deductions to be paid to the landlord. Tenancy Deposit Protection: What Is A Stakeholder? This deposit will be held by GEI Ltd as Stakeholder. between receipt of the deposit and the issue of the TDS certificates CEL held the money as agent or trustee of HPL. As an agent, you may face the position where a landlord wants you to transfer a deposit from one tenancy deposit protection scheme to another. Stakeholder: Means to hold the Deposit as a third party, rather than acting as an agent for the Landlord. The Agent is a member of the Tenancy Deposit Scheme as run by the Dispute Service Limited. var prefix = 'ma' + 'il' + 'to'; For a lettings agent this event will usually be the end of the tenancy and an agreement between the parties as to what should happen to the money, the decision of a Court, or a request from an approved TDPS to pay the money to them to await dispute resolution. Subject to the above, the agent is bound to await the happening of the event and then to pay the money to one or other of the parties according to the event. The second alternative argument, if CEL was a stakeholder of the deposits, relied on the legislation introduced by the Act to protect tenants’ deposits; ss. Each Tenancy was for 12 months commencing in early October 2016  and the offences had occurred on the inspection in late July or early August 2017. stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property. The case of … At trial the two remaining defendants were Leycam Ltd and CEL. Implications for Landlords – Common Law Tenancies. The landlord holds the money on trust for the tenant. 234(3). In these circumstances he may (i) interplead and pay the money into Court; (ii) retain the money pending the resolution of the dispute; or (iii) take the risk of paying one party. PainSmith Solicitors are based in Melstead, Alton. var addy8f174f297b1c32fc5f7578dc1a176c66 = 'nicholasgrundy' + '@'; If CEL had not received the first month’s rent and had only been the deposit holder in elation to the tenancy of each HMO the prosecutions might have failed. This right may be excluded by special arrangement, usually within the tenancy agreement. The relationship between the stakeholder and the landlord and tenant is a contractual one. The deposit amount to be held by the previous agent as Stakeholder as secrurity for performance of the Tenant's obligations. Tenancy Agreement On Deposit. •    Get Trading Standards to investigate bank accounts. var path = 'hr' + 'ef' + '='; the contract that gives rise to a deposit being paid, and one between the principals and the stakeholder which sets out the basis on which the deposit is held and must be released. For example a term of the holding deposit might state that it's non-refundable. In the circumstances DJ Newton did not have to decide whether or not CEL was a person managing the HMOs as a result of its receipt of the deposits. (This refers to the conditins of the DPS. Leycam pleaded guilty to the three offences of failure to licence the flats as HMOs and 9 of the other 12 offences, all relating to the condition of the flats. The money is payable to the party entitled on demand, and if the agent fails to pay in accordance with a proper demand he is liable for interest from the date of the demand. It will save you a huge amount of problems if at the end of a tenancy there are deductions to be made. •    However, if, as is often the case that agent also received the first payment of rent, that should bring them within the definition of person managing. You can ask for compensation if your landlord or agent broke the tenancy deposit rules. This money will be held by Get Living London during the tenancy. TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy. the trading name) as the ‘Agent’ of HPL and stated that the deposit was held by ‘Citydeal Estates as Stakeholder’;(2)    The Tenancy Agreements made no express reference to CEL;(3)    There was no separate second agreement between HPL, the tenants and CEL;(4)    Accordingly, this was not a stakeholder arrangement as the tenants had not agreed that CEL held the deposit as stakeholder. The relationship is that of debtor and creditor, and is similar to that between a banker and his customer. Each flat was a licensable HMO under Camden’s 2015 additional licensing scheme. An exception is when it’s protected with an insurance-based scheme. •    Some TDS’s state that the agent holding the deposit does so as ‘stakeholder’. Stakeholder Where the Deposit is held as ‘Stakeholder’ no deductions can be made from the Deposit without consent, preferably in writing, from both parties, or from the court, or an adjudication decision from the TDS. None of the flats were licensed. The second contract is the tripartite contract, which results from the deposit of the money with the agent as stakeholder on terms that he is to keep it until one or other of the relevant events happens, and then pay it to one or other of the parties accordingly. If he takes the second course, he may notify the parties that he is content to await the outcome of the dispute. Insofar as the deposits were concerned CEL argued that it held those as a stakeholder and that stake-holding is a different legal status to agency and trusteeship. •    It is therefore important to get accurate and full information from the tenants. To establish which companies were managing the HMOs Camden sent information requests under the Local Government (Misc. Stakeholder shall mean the party holding the Deposit during the tenancy as defined in 1.8.2, who holds the deposit as a quasi-trustee on behalf of both parties. Hi All Just received a contract for my new tenants starting in August 1. Please refer to clause 26 of this agreement.' The law states that the tenancy deposit is a property of the tenant. •    The tenants have an interest; on a successful prosecution they can get a rent repayment order. . We have noticed that on the Helpline there is still some confusion about what this actually means. The implications of common law tenancies are: (1) a different tenancy agreement from the usual AST will be required, and Firstly, there is the bilateral contract between the two principals, the landlord and tenant in our case, which contemplates two possible alternative future events, and by which the parties agree to pay a sum of money to a stakeholder to abide by the happening of one or other of them. We have noticed that on the Helpline there is still some confusion about what this actually means. In the legal world PDFs are often seen as the ideal replacement for paper-based systems. The tenants provided Camden with numbers of the bank accounts into which they paid their deposits and rent. 1.5. TDS: Tenancy Deposit Scheme. Note: A tenancy for 6 months can still be a high-rent tenancy if the rent exceeds the rate of £8333.33 per month. Nicholas Grundy QC is a barrister at Five Paper and represented the London Borough of Camden. Provisions) Act 1972, s. 16; and. Whenever possible the agreement of both parties should be obtained (in writing) as to how the deposit is to be disbursed. They are implicit in the transaction itself, and must be discovered, not by implying terms, but by analysing the relationship of the parties which arises from the deposit of the money. • Stake-holding is a different legal relationship to trusteeship and agency. This is to prevent the deposit being paid to either the … In the case of a tenancy agreement, the relevant event would be the failure to maintain the Premises for the duration of the agreement or to pay any costs associated with the occupation of the Premises, such as utility bills. The deposit will be held by the seller’s solicitor as either "stakeholder" or "agent". (3)    Trading Standards requests of banks under the Consumer Rights Act 2015. If you hold the deposit as Stakeholder, you need both the landlord and tenant’s consent when apportioning its return at the end of a tenancy. 72(1), and the condition of the flats to offences under ss. Millet LJ also stated that stake-holding usually requires two contracts: one between the principals; i.e. The ownership and management arrangements for the three HMOs were complicated. This leaves open the question of whether this principle would apply to a statutory periodic tenancy arising after the expiry of the fixed term tenancy under the Housing Act 1988, s. 5; such statutory periodic tenancy is a separate tenancy from the fixed term tenancy that has just ended. Tenancy Deposit Scheme and The Dispute Service: All deposits taken for Assured Shorthold Tenancies must be protected by a Tenancy Deposit Scheme. The failures to licence the HMOs gave rise to offences under the Act, ss. addy8f174f297b1c32fc5f7578dc1a176c66 = addy8f174f297b1c32fc5f7578dc1a176c66 + 'fivepaper' + '.' + 'com'; While some agents' perseverance is commendable, sometimes walking away and allowing the landlord and tenant to talk to each other is the better option. District Judge Newton held that the receipt of the first month’s payment of rent was enough to make CEL a person managing the HMOs for the whole of the term of the tenancy. Stakeholder Where the Deposit is held as ‘Stakeholder’ no deductions can be made from the Deposit without consent, preferably in writing, from both parties, or from the court, or an adjudication decision from the TDS. In that case Lord Justice Millet set out a series of general propositions about the status of stakeholders, including that: ‘the stakeholder is not a trustee or agent; he is a principal who owes contractual obligations to the depositors’, i.e. This is usually described as his reward for holding the money. After the introduction of Tenancy Deposit Protection agents are required, where they are holding deposits, to do so as a stakeholder. We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits. Retox Digital. The agent's rights and obligations are not normally expressly spelled out. to both the other parties. 1.6. We think that the arguments in this respect were finely balanced. Provisions) Act 1976, s. 16, to HPL and CEL. He can be contacted at This email address is being protected from spambots. •    It is arguable that stakeholders of deposits are not a person managing an HMO. If a tenant wishes to make a counter claim, they will need to take that matter to court. var addy_text23239deeae0dde161900b8d1ad9859e1 = 'Jack.Kane' + '@' + 'camden' + '.' + 'gov' + '.' + 'uk';document.getElementById('cloak23239deeae0dde161900b8d1ad9859e1').innerHTML += ''+addy_text23239deeae0dde161900b8d1ad9859e1+'<\/a>'; [1] LB Camden v (1) Leycam Ltd. and (2) Citydeal Estates (London) Limited (13.7.2018) Unreported, Your job vacancy here from just £495 + VAT. In practice this is now unnecessary as the agent will normally be required to pay the money to an approved TDPS who will hold it pending the outcome of any Court action. 1. That too may have been an offence under the LG(MP) Act and could have been pursued. TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy. Insofar as the rent payments were concerned, CEL accepted that it received the first month’s rent in each case as HPL’s agent but argued that it was a single payment of rent in each case made before the start of the relevant tenancy agreement and some ten months’  before the offences. 72(3) and 234(3) can be brought against any ‘person managing’ an HMO as defined in ss. Where a stakeholder is involved, there are normally two separate contracts to be considered. Stakeholder shall mean the party holding the Deposit during the tenancy as defined in 1.8.2, who holds the deposit as a quasi-trustee on behalf of both parties. var addy_text8f174f297b1c32fc5f7578dc1a176c66 = 'nicholasgrundy' + '@' + 'fivepaper' + '.' + 'com';document.getElementById('cloak8f174f297b1c32fc5f7578dc1a176c66').innerHTML += ''+addy_text8f174f297b1c32fc5f7578dc1a176c66+'<\/a>'; •    In this case a letting agent received deposits on behalf of the owner and claimed to hold them as stakeholder. var addy23239deeae0dde161900b8d1ad9859e1 = 'Jack.Kane' + '@'; This case raises the question of what information do councils’ need to decide who to prosecute for HMO offences and how can they get it? •    A person managing an HMO can include a person who receives payments as agent or trustee of the owner; e.g. CEL argued that it cannot have been the intention of the Act to impose liability on an agent who arranges the letting and receives only the first payment of rent and that receipt of one of payment of rent in October 2016 was not enough to bring CEL within the definition of person managing in August 2017. •    Stake-holding is a different legal relationship to trusteeship and agency. We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits. • Some TDS’s state that the agent holding the deposit does so as ‘stakeholder’. Stakeholder for the deposit Get Living London can only take money from your deposit at the end of the tenancy if you agree. If he is not joined, the Court cannot order the money to be paid to the successful party. It therefore shows good management technique to have fully explained this in advance to both parties. Definitions and interpretation of this agreement 1.1 In this Agreement the terms in bold on the cover page of this Agreement have the meanings set out next to them. This is dependent on the terms of the holding deposit. The legal world’s “perfect” solution to paper-based working that is anything but! Camden’s first argument was more fully developed as follows:(1)    The Tenancy Agreements referred to Citydeal Estates (i.e. The Dispute Service Ltd PO Box 1255 Hemel Hempstead Herts HP1 9GN T: 08452667837 F: 01442253193 E: deposits@tds.gb.com £44,863 - £48,894 per annum (City Pay Band 8), Grade 10 £49,863 to £51,845 (Bar at £50,859) per annum (*inclusive of reviewable market…, Grade 8 £34,728 to £38,890 (Bar at £37,890) per annum. •    An agent holding a deposit as stakeholder may not be a person managing an HMO. Additionally, on inspections in July and August 2017 it was found that the condition of the flats, particularly of the windows, some being held in place by sellotape and described by Jack Kane as ‘the worst he had ever seen’, were in significant breach of the HMO management regulations. All it can do is to declare that the successful party is entitled to give a good receipt for the money. they did not identify the company holding the deposit.•    The Tenancy Agreements also stated that the Rent was payable to ‘Citydeal Estates’. Insofar as the tenants are concerned, they may be more forthcoming if they are made aware  that if any prosecution is successful they may be entitled to a rent repayment order. document.getElementById('cloak8f174f297b1c32fc5f7578dc1a176c66').innerHTML = ''; a stakeholder cannot be an agent or a trustee. How long do you think it will take the public sector to get back to business as usual after coronavirus? CEL relied on Manzanilla Ltd. v Corton Property & Investments Ltd, an unreported Court of Appeal decision. (3) In this Act “person managing” means, in relation to premises, the person who, being an owner or lessee of the premises–(a)    receives (whether directly or through an agent or trustee) rents or other payments from–(i)    in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises; and(ii)    in the case of a house to which Part 3 applies (see section 79(2)), persons who are in occupation as tenants or licensees of parts of the premises, or of the whole of the premises; or(b)    â€¦and includes, where those rents or other payments are received through another person as agent or trustee, that other person. •    Tenancy deposits must be held in accordance with a Tenancy Deposit Scheme. On the sale or lease of a property, except in exceptional circumstances, a deposit being a proportion of the price agreed will be payable to the seller's solicitors on exchange of contracts. This case, involving an off-shore ‘owner’, two ‘managing agents’ and a ‘letting agent’ for three HMOs in the same building shows the need to get accurate information as to which company or companies, the tenants pay the rent and other payments. Previously I have managed the deposit (paid to me via agent) and protected it, returned at the Where applicable Cluttons will register the deposit monies with a Tenancy Deposit Protection Scheme on behalf of the Landlord, as detailed below. You need JavaScript enabled to view it. You need JavaScript enabled to view it. Masons operate an insurance based scheme as members of ARLA and RICS, through The Dispute Service (TDS) and hold deposits as stakeholder on behalf of landlords and tenants. Most deposit withdrawals are agreed between the tenant and the landlord, without the need for TDS`s dispute resolution service. The Tenancy Deposit Scheme is only able to provide dispute resolution for matters concerning the deposit. 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