Archive for November, 2009

Tenancy Deposit Protection Schemes

Friday, November 27th, 2009

What is the Tenant Deposit Scheme?

From 6th April 2007 any landlords or their agents who take a deposit from a tenant must have that deposit protected under one of two schemes:

1. A custodial scheme – this is where the deposit is held in an approved scheme during the deposit and will continue to be held if any legal dispute arises between the
landlord and the tenant.

2. An insurance based scheme – this is where the landlord keeps the deposit but the deposit is insured in case of any dispute.

It is for the landlord (not the tenant) to decide which scheme to choose. The custodial scheme is free to landlords and tenants. Part of the interest generated by
holding the deposit in the custodial scheme will be used to administer the scheme, the remainder of the interest will be paid to the tenant or the landlord.

However under the insurance based scheme the landlord must pay a premium, but keeps the deposit. If a dispute arises between the landlord and the tenant the landlord
must hand over the deposit to the scheme for safekeeping until the dispute is resolved. If the landlord fails to handover the deposit the scheme will abide by any
court order or ADR decision to pay the tenant and recover the money from the landlord.

At the end of the tenancy agreement the landlord and the tenant must agree on the amount of the deposit which is to be returned to the tenant and this must be repaid
within 10 days of agreement being reached (or in the case of the custodial scheme within 10 days of the scheme being notified of the agreement).

Are any landlords exempt from the requirement to protect deposits in a recognised scheme?
The new law applies to all new tenancy agreements from 6th April 2007 where the landlord takes a deposit from the tenant even if a landlord lives overseas. If the property is in England or Wales and the landlord takes a deposit then they will have to protect the deposit under one of the recognised schemes.

The new law does not apply to any landlords who do not take a deposit from the tenant.

The new law does not apply to tenancy agreements created before 6th April 2007. It also does not apply to tenancies created before 6th April 2007 which come to an end
after 6th April 2007 but continue as a periodic tenancy. However, if a replacement tenancy agreement is signed after 6th April 2007 the tenancy deposit scheme will
apply to the deposit taken prior to 6th April 2007.

Who will run the schemes?
There are currently three bodies approved by the government to administer the scheme:

1. The Deposit Protection Service (Custodial Protection Scheme) The Pavilions Bridgwater Road Bristol BS99 6AA Tel. No. 0870 7071 707

2. Tenancy Deposit Solutions Ltd (insurance-based tenancy deposit protection) Tenancy Deposits Solutions Ltd 3rd Floor, Kingmaker House Station Road New Barnet
Hertfordshire EN5 1NZ Tel. No.: 0871 703 0552

3. The Tenancy Deposit Scheme (insurance-based tenancy deposit protection) The Dispute Service Ltd PO Box 1255 Hemel Hempstead Hertfordshire HP1 9GN Tel. No. 0845 226

What information about the scheme is the tenant entitled to receive?
The landlord must inform the tenant of the details of the scheme and how the deposit is protected within 14 days of receipt of the deposit. This is done by serving written details on the tenant. The written details must include specific information (“the prescribed information”).

The CompactLaw Landlord’s Pack tenancy agreements have the prescribed information attached so that it can be served at the same time as the tenancy agreement. If a landlord fails to serve the written information on the tenant they will not be able to serve a s.21 notice requiring possession of the property at the end of the tenancy (although a landlord can still seek possession under any of the other grounds which apply to assured shorthold tenancies).

A tenant can seek compensation from the landlord for failure to serve the written information and this will be equivalent to three times the value of the deposit.

What happens if a dispute arises between the landlord and the tenant about the deposit?
Both schemes are subject to Alternative Dispute Resolution (ADR). However the use of ADR is not compulsory. However if a landlord and tenant agrees to use ADR then they will be bound by the decision of the ADR service and cannot have the matter settled by the court instead. Where a landlord or tenant is contacted by the scheme administrator and asked if s/he is prepared to consent to ADR and they fail to reply, the scheme can proceed with ADR simply on the basis of the consent of one party.

Instead of ADR the landlord or tenant can apply to the court to settle disputes about the return of deposits.


The National Minimum Wage

Friday, November 27th, 2009

The National Minimum Wage Regulations became law on the 1st April 1999 to enforce a statutory minimum wage making it illegal for employers to pay less.

The Regulations apply to employers in the UK, regardless of the size of the business, subject to the exceptions listed below.

The Minimum Wage Rates
1. Standard minimum wage of £5.80 per hour for workers aged 22 or over.

2. Minimum wage level of £4.83 per hour for workers aged 18-21 inclusive. This is known as the “development rate”.

3. Rate for 16 and 17 year olds. Minimum wage level of £3.57 per hour for workers aged 16-17.

4. Fair Piece Rates From 1st October 2004 employers have had to pay employees on piece rate work the same as the national minimum wage. From April 2005 this rate was increased to 120% of the national minimum wage. (This means that most piece workers will instead be paid the national minimum wage hourly wage.)

Workers Covered by the Regulations The following workers are covered by:

  • Full-time workers
  • Part-time workers
  • Casual workers
  • Home workers
  • Freelance workers
  • Temporary & agency workers
  • Those of retirement age or pensioners if they are working
  • Piece workers, who must be paid the minimum wage for every hour worked.

(Detailed information regarding Piece workers is provided in the National Minimum Wage Regulations).

Workers Not Covered The Regulations do however allow for exceptions, the following workers are not covered:

  • Some Apprentices
  • Members of the armed forces
  • Share fishermen
  • Volunteer workers
  • Prisoners employed during their sentence
  • The self-employed
  • Au pairs and nannies.

Employers will not be able to avoid paying less than the minimum wage by making current employees become self-employed. There are strict tests under employment law
regarding who is judged self-employed and who counted as an employee.

Enforcement of the Regulations The Regulations are enforced by the Inland Revenue and the Contributions Agency.

An employer can be served with an Enforcement Notice by the Inland Revenue or the Contributions Agency instructing him to comply with the law within a set time period.
If the employer fails to comply they will be made to pay a civil fine of twice the amount of the national minimum wage per day for every worker paid below the minimum

There is also a criminal fine for the following situations:

  • Refusing to comply with the Regulations.
  • Failing to keep proper wage records or keeping false records.
  • Obstructing an official from either the Inland Revenue or the Contributions Agency.

Finally An employee cannot agree orally or in writing with his / her employer to be paid less than the minimum wage, this will still be an offence committed by the


Holidays – What are my rights?

Friday, November 27th, 2009

When you book a holiday a contract exists between yourself and the Tour Operator. The Booking Agents act on behalf of the Tour Operator.

The Terms will be set out in the Tour Operators’ brochures. The Tour Operator is also liable for the services provided to you by hotels and airlines if it is part of
the Tour Operator’s package.

The Association of British Travel Agents (ABTA) has issued two Codes of Conduct to protect holidaymakers, namely, the Tour Operators’ Code and the Travel Agents’ Code.

The Tour Operators’ Code provides that Tour Operators must include information in their brochures regarding the following:

a. Liability – For foreign inclusive holidays the contract must include a term “accepting responsibility for acts and/or omissions of their employees, agents,
sub-contractors and suppliers.” However they can limit liability for acts and omissions which occur during the actual transportation, e.g. by air, rail or sea, if this
complies with international conventions.

b. Cancellation – The cancellation must not be made after the dates the balance of the price becomes due otherwise the Tour Operator must pay compensation on a scale.
The nearer to departure cancellation occurs the higher the compensation will be. If cancellation occurs before the balance of the price is paid then the customer must
be told as soon as possible and offered either a full refund or an alternative, comparable holiday.

c. Over Booking – If a holiday is cancelled or altered due to over-booking of hotels and the Tour Operator is aware over-booking has occurred they must immediately
inform the customer and offer an alternative, comparable holiday or full refund. If over-booking is only discovered on arrival by the customer then they must be
offered alternative accommodation and if the location or facilities are inferior, they must be offered compensation.

d. Surcharges – These must not be made less than 30 days before departure or they will not be recoverable. Also Tour Operators are expected to bear up to 2% of the
increased cost of the holiday price. If surcharges exceed 10% then the customer may cancel the holiday and seek a refund.

e. Building Works – The Tour Operator must notify customers if they become aware that building works exist at a resort and it is likely to affect the enjoyment of the holiday. They must offer the customer an alternative resort or their money back.