Category Archives: Landlord

London landlords deserting capital in search of higher profits following sixth month of rent falls

for_saleBuy-to-let landlords are buying more properties outside London following the 6th consecutive month of rent falls in the capital according to the UK’s largest estate agent, Countrywide.

Fifty-per-cent of London buy-to-let landlords are looking to buy properties outside London this year according to Countrywide’s new figures. In 2016, London landlords purchased over 22,000 homes outside of the capital – a seven-fold increase on the 3,311 recorded in 2010 when Countrywide first began keeping records.

In April, just 12 per cent of London homes were sold to buy-to-let landlords which is close to a record low.

Countrywide says that London landlords are increasingly looking to northern England for buy-to-let properties with Liverpool becoming a particular hot-spot in the buy-to-let sector.

Landlords looking further afield hope to benefit from better yields and lower stamp duty. Average stamp duty currently stands at £40,000 in the capital which falls to £6,300 outside of London.

Around 9 per cent of buy-to-let properties in the north were sold to London landlords and 26 per cent of London landlords picked up property in the East of England.

Johnny Morris, Countrywide’s research director, said: “In response to slower price growth and government tax hikes, London landlords are looking further than ever to find a return.

“Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.

“Rental growth remains low across Great Britain. Mostly driven by London where rents have fallen for the sixth consecutive month.

“The repercussions of the stamp duty rush are still playing out in the rental market as stock levels continue to remain high.

“But with fewer investors buying in the capital we will likely see stock levels fall, driving future rental growth.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Tony Blair sets up buy-to-let company to avoid tax rises on £33 million property empire

Former Prime Minister Tony Blair
Former Prime Minister Tony Blair

Former Prime Minister Tony Blair has set up a company to manage his £33 million property empire, joining a growing number of landlords who are opting for incorporation to beat tax rises on buy-to-let operations.

Blair, along with wife Cherie and eldest son Euan, are believed to own a total of 38 properties. The families’ property portfolio includes flats in north-west England which Mrs Blair and their son let out via an existing company, Oldbury Residential Ltd, which holds investments worth £2.4m in the year ending April 2016.

The family has reportedly banked at least £1.7m in profits from buying and selling nine properties, and they also have an extensive portfolio of private homes, including a £9m five-storey Georgian townhouse which they purchased in 2004 and a £10m Grade I-listed Buckinghamshire manor house.

Now Mr and Mrs Blair have set up another company, Harcourt Ventures Ltd, to let and manage properties, with Tony Blair owning half of the shares and his wife named as the sole director.

Landlords incorporating to reduce tax liabilities

Setting up a limited company is one of several ways in which private landlords have responded to recent tax changes within the private rented sector. These changes include increases in stamp duty and cuts to mortgage tax relief introduced in April which no longer allow landlords to offset mortgage interest from their rental income.

The reduction of Mortgage Interest Relief, first proposed by former Chancellor George Osborne in the 2015 Summer Budget, eliminated landlords operating as sole traders from deducting mortgage interest payments from their rental income to reduce their tax liabilities.

Cherie Blair Law Firm Hired By Landlord Group

Landlord groups have fought several failed campaigns against the tax changes via petitions and talking their case to the High Court hiring Cherie Blair’s law firm, Omnia strategy, to argue that the tax changes breach landlord’s human rights.

Speaking after the landlords lost a high court review in October last year Mrs Blair said: “We know the case has been supported and followed with interest by a large number of individual landlords. Many of these landlords now face challenging times ahead.

“From the outset, the legal process was just one aspect of our clients’ fight against this unfair measure. Together with their impressive and growing coalition, they will continue to engage with the government, and the legal team wishes them every success.”

Landlord Fight-back

Buy-to-let landlords are now incorporating their lettings operations as limited companies to avoid the tax changes and to secure additional finances to buy more properties according to industry statistics.

The proportion of homes available for rent in the UK, owned by a company landlord, reached 20 per cent in the first quarter of 2017 – the highest number since records began in 2010.

Landlords incorporating their businesses to avoid the tax changes would have to pay stamp duty land tax on the transaction, which now stands at 3 per cent. Capital gains charged on the transfer to the company may be deferred until it is sold again and profits are taxed at 20 per cent, though this is set to reduce to 18 per cent by 2020.

The deferment of capital gains tax is called incorporation relief, but in order to qualify landlords must demonstrate that the property is part of an actual business rather than just a passive investment. Some landlords are now claiming to provide additional services such as cleaning or gardening in order to lower their tax liability.

Incorporated landlords can claim £5,000 per year as a tax-free dividend but any income over this amount will be charged at 7.5 per cent for basic-rate taxpayers, 32.5 per cent for higher-rate payers and 38.1 per cent for additional-rate payers.

However, most financial experts advise that the statutory obligations and costs involved in running a company outweigh any tax savings for most landlords unless they have a sizeable property portfolio.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Rogue landlords who stuffed 31 people into four-bedroom Wembley house found guilty

Garden shed: The only woman at the address was housed in the shack (Brent Council)
Garden shed: The only woman at the address was housed in the shack (Brent Council)

A family of rogue landlords have been convicted of breaching landlord licensing rules after they were caught cramming 31 people into a four bedroom property in Wembley.

Mother and daughter Harsha and Chandani Shah, and Mrs Harsha Shah’s brother, Sanjay Shah, were caught following enforcement action taken by Brent Council at the property on Napier Road during a raid in July last year.

Officers found a woman  living in a lean-to shed in the back garden.  The shack had no lighting or heating and was made out of wood offcuts, pallets and tarpaulin.

Inside the house, officers found some residents hot-bunking with occupants sharing a single bed with night workers swapping sleeping shifts with those who worked during the day.

Four beds were discovered piled into the front room and three in each bedroom. The tenants are all migrants, who said they could not afford to live anywhere else. One of the residents, Bagharad, revealed he lived in the house on Napier Road because he worked as a carer for the elderly and was only paid £30 a day.

The family earned around £112,000 a year from the tenants and were found guilty of breaching landlord licensing rules.

Jaydipkumar Valand, who collected the rent for the Shah family, pleaded guilty at trial in December last year.

Judgement

Spencer Randolph, head of private housing services at Brent Council, said: “This judgement sends out a clear message that Brent has a zero tolerance policy towards landlords who break the law and exploit vulnerable tenants.

“The lean-to shack we found in the back garden of the property in July last year looked like something you would expect to find in a Hollywood depiction of a shanty town.

“We will prosecute any landlord or agent we find housing tenants in cramped or hazardous conditions.

“Brent’s aim is to help renters by ensuring decent living conditions within the borough.”

On Tuesday 23rd May, the judge at Willesden Magistrates Court said: “This trial has revealed how people desperate for accommodation in London can be exploited and have paid to live in grossly overcrowded, unhygienic and unsafe conditions.”

The judge also ordered the defendants to pay Brent Council £35,000 in costs. The four defendants will be sentenced at a crown court at a later date.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Landlord investigated for banning “colored people” because they smell of curry says insurance needed to deal with curry smell in rented homes

Fergus Wilson and his wife Judith CREDIT: REX FEATURES
Fergus Wilson and his wife Judith CREDIT: REX FEATURES

One of Britain’s biggest landlords, Fergus Wilson,  under investigation by the Equality and Human Rights Commission for banning “colored people” whom he claims leave his properties “smelling of curry” is in the news once again.

Wilson has suggested a specialist insurance company should be set up to deal with cases where tenants leave homes smelling of curry. The property tycoon, who lives in Boughton Kent, is currently facing legal action from a public body after banning Indian and Pakistani tenants from renting his properties because he claimed they left a bad smell.

The Equality and Human Rights Commission (EHRC) has recently applied for an injunction at Central London County Court against Wilson over his controversial lettings policy. Mr Wilson who denies accusations of racism, insists his decision is purely economical after spending thousands of pounds removing the smell of curry from one of his properties.

Speaking to Kent News, Wilson has called for an insurance policy to be in place to cover him in such situations in the future. “If someone punches a wall and leaves a dent, you can take a photograph to prove it,” he said.

“How do you prove there is a smell? It’s impossible to prove because they might have got so used to the smell that they don’t notice it.

“The thing is, a curry smell is not malicious damage – we are insured for someone smashing the house up but not for that.

“If they are cooking curry they are not doing it maliciously but they are ‘injuring’ the house. If the EHRC set up their own insurance company to underwrite claims there would be no problem. If that had been in place I would not have made those comments.

“These are all economic judgments. It costs as much for a new carpet as you are achieving in rent for six months.”

Battered wife ban

Wilson is no stranger to controversy. In January this year it emerged that he banned “battered wives” from his properties claiming he does not want to risk ex-husbands or boyfriends returning to destroy his houses.

Also included on the list of proscribed tenants were children under 18, single adults, battered wives, tenants without a rent guarantee, people on housing benefit, low income workers, zero hours workers, plumbers, smokers and pet owners.

Wilson, who at one point owned 1,000 homes in Maidstone and Ashford, was unrepentant when challenged about the latest ban.

“To be honest, we’re getting overloaded with coloured people.”

“It is a problem with certain types of coloured people — those who consume curry — it sticks to the carpet.

In the same year he sent eviction notices to over 200 of his tenants, many from low income backgrounds, claiming that he was “sending battered wives back to their partners to be beaten up again”. He was also convicted in the same year for assaulting an estate agent over a broken boiler which he denied, claiming that he was “too fat to punch anybody or even tie his own shoelaces”.

Wilson admits there was an element of discrimination in his “no-coloreds” policy, but insisted it was legal and fair because car insurance companies impose higher premiums on “high-risk” drivers.

“I live in rural Kent and you do not get an awful lot of people making an application from that ethic group,” he said.

“However, no one, but no one has done more for black tenants in Ashford than I have – I have bent over backwards to help them.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Buy-to-let tycoon Fergus Wilson facing legal action after admitting he banned ‘coloured’ tenants making his homes ‘stink of curry’

fergus-wilson

Britain’s biggest buy-to-let landlord Fergus Wilson is facing legal action after defending his policy to direct his letting agents not to let his properties to “coloured” people whom he claimed make his homes “stink of curry”.

Mr Wilson refused to deny making a list of requirements for tenants in an email to a letting agent seen by the Sun newspaper. He did however say that it was “some time ago”.

Wilson, who has previous convictions for assault and who last year failed in a bid to run for the role of Kent’s police and crime commissioner, said the controversy started when he bought a house in Ashford at a discounted price because of a strong smell of curry.

“I said when I bought it that within six months it’d be sorted but we just could not get rid of the bloody smell – it absolutely stank of curry,” he told Kent News.

“The carpets had to come up and the whole job meant throwing £12,000 down the drain.”

Mr Wilson then bought another house nearby but said a mixed-race family left the house smelling of curry at the end of their tenancy.

“It was a case of once bitten, twice shy,” he said.

“Having spent six months on the first one I said ‘no I’ve have enough, I do not want to take on another house where I have to get rid of a curry smell’.

“Yes, I accept not every individual coloured person likes and eats curry but I think a high proportion do and I had to go on probabilities.

“It was done because I did not care to repeat the experiences of before.”

When challenged on the use of language many would find offensive, he responded: “I use the term ‘coloured’ because it’s quicker and easier than saying ‘people from India, people from Africa and people who are Arabic’.

“To anybody who says I’m racist, I’ve just employed a coloured person.”

“Battered-wife” letting ban

This is not the first time Mr Wilson has been in the public eye for discriminating potential tenants. In January he issued letting criteria which banned single mums, battered wives, plumbers and low income earners.

His ban on battered wives came following his attempt to run stand for election for Kent’s Police and Crime Commissioner on an anti-domestic violence platform. In the end his candidacy was ruled ineligible by the election officer for his previous assault conviction. Wilson also claimed that if elected he would return illegal immigrants to France the day after they arrive in Kent.

Speaking to the Sun Wilson denied he was a racist saying “To be honest, we’re getting overloaded with coloured people. It is a problem with certain types of coloured people – those who consume curry – it sticks to the carpet. You have to get some chemical thing that takes the smell out. In extreme cases you have to replace the carpet.”

He further claimed that while he doesn’t today employ a specific policy banning “coloureds” he estimates he’s only rented to 14 mixed-race tenants over his two decades in the property business.

“As long as their money is green, we’re happy to have them,” he said.

“But if the same situation happened again tomorrow, I would say the say thing, because I was being practical.”

Discrimination investigation

Rebecca Hilsenrath, the chief executive of the Equality and Human Rights Commission said the watchdog would be investigating the comments and warning Wilson that he could face legal action.

“These are truly disgusting remarks as well as being unlawful instructions from a landlord to a letting agent,” she said. “There are still deep inequalities in our society as our race report demonstrated and these comments show why.

“As a country we all assume we have left the dark ages behind, but clearly there is more to be done. We will investigate and will be asking Mr Wilson to explain his actions. Unless we are satisfied that he will not commit unlawful acts in the future we will take legal action”.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Britain’s biggest buy-to-let landlord bans ‘coloureds’ from renting his properties because they ‘make them smell of curry’

Fergus Wilson and his wife Judith CREDIT: REX FEATURES
Fergus Wilson and his wife Judith CREDIT: REX FEATURES

Britain’s biggest buy-to-let landlord has banned ‘coloureds’ from renting his properties because they make them smell of curry.

In an email to his letting agent Evolution Properties, Fergus Wilson, 70 from Kent said: “No coloured people because of the curry smell at the end of the tenancy.”

Wilson who is reportedly worth around £100 million is no stranger to controversy.  In January it emerged that he banned “battered wives” from his properties claiming he does not want to risk ex-husbands or boyfriends returning to destroy his houses.

Also included on the list of proscribed tenants were children under 18, single adults, battered wives, tenants without a rent guarantee, people on housing benefit, low income workers, zero hours workers, plumbers, smokers and pet owners.

Wilson, who at one point owned 1,000 homes in Maidstone and Ashford, was unrepentant when challenged about the latest ban.

“To be honest, we’re getting overloaded with coloured people.”

“It is a problem with certain types of coloured people — those who consume curry — it sticks to the carpet.

“You have to get some chemical thing that takes the smell out. In extreme cases you have to replace the carpet.”

While Mr Wilson’s latest policy would not breach criminal law he could be sued in a civil court and has already been chastised by anti-racism group Hope Not Hate.

In December 2014 he banned tenants who shared his surname after several cases of ‘mistaken identity’ led to council tax disputes.

In the same year he sent eviction notices to over 200 of his tenants, many from low income backgrounds, claiming that he was “sending battered wives back to their partners to be beaten up again”.  He was also convicted in the same year for assaulting an estate agent over a broken boiler which he denied, claiming that he was “too fat to punch anybody or even tie his own shoelaces”.

Evolution, which manages hundreds of Wilson’s properties, has also condemned the policy and said it would never implement it. Evolution’s manager, Roy Fever, said: “We don’t condone this at all.

“We would never implement a policy like that. We put through anyone to the landlord and it is up to the landlord who they take on.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

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Britain’s biggest landlord bans ‘battered wives’ and zero hours workers as tenants

Fergus Wilson and his wife Judith CREDIT: REX FEATURES
Fergus Wilson and his wife Judith CREDIT: REX FEATURES

Britain’s biggest landlord, Fergus Wilson has banned “battered wives” from his properties claiming he does not want to risk ex-husbands or boyfriends returning to destroy his houses.

Perhaps Britain’s most notorious buy-to-let landlord, Wilson is no stranger to controversy.  In 2014 he sent eviction notices to over 200 of his tenants, many from low income backgrounds, claiming that he was “sending battered wives back to their partners to be beaten up again”.  He was also convicted in the same year for assaulting an estate agent over a broken boiler which he denied, claiming that he was “too fat to punch anybody or even tie his own shoelaces”.

Posted for residents of Ashford (Kent), the list of unacceptable tenants include:

  • Zero hours workers
  • Battered wives
  • Tenants on housing benefits
  • Tenants with children under 18
  • Single parents
  • Plumbers
  • Smokers
  • People with pets
  • Low income workers

Despite Mr and Mrs Wilson’s estimated wealth of £200 million, the couple are known for penny-pinching. In 2014 Fergus Wilson lost a court battle to charge a tenant £3,000 for a broken toilet lid even though the tenant had offered to replace it out of his own pocket. Judith Wilson is also believed to owe £3,000 in court costs after a failed attempt to sue a gas engineer for £5,000. The Wilsons had claimed that the engineer’s decision to issue an “At Risk” notice on gas equipment in one of their properties had made the house unrentable. Such considerations factored into Fergus’ decision to ban plumbers as tenants in his latest letting criteria since he believes they “rip him off” about repairs and “invent” problems with the properties which he says they bill him for.

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Fergus Wilson’s ban of domestic abuse victims comes after the 69-year old’s unsuccessful bid  to stand as an independent candidate for Kent’s Police and Crime Commissioner last year which was blocked  for incorrect submission of nomination papers. It was also expected that Wilson’s candidature would be deemed ineligible for a conviction of assault for which he was fined £500. Wilson, who planned to stand as an independent, intended to run on a platform of tackling domestic violence saying that he was particularly concerned by two domestic abuse cases involving Kent Police and would have used his £85,000 salary to fund a rapid-response team of four officers.

Commenting on the tenancy rules Fergus said the criteria are revised every year and are concerned with “financial fine tuning of the business” adding: “it is just economics… I live in the big bad world of reality, if I do not let properties and do not get the rent then I do not eat, I starve to death… it is the Government’s job to help poor people.”

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Buy-to-let landlord group represented by Cherie Blair loses court tax challenge

Cherie Blair Royal Court Justice landlord group

A landlord lobby group represented by Cherie Blair have seen a legal challenge to restrictions on buy-to-let tax relief dismissed at the Royal Courts of Justice today.

The landlord coalition called “Axe the Tenant Tax” was refused permission by a senior judge to seek a judicial review of tax changes announced by former Chancellor George Osborne in 2015 which are set to be introduced in April 2017. Under the proposed tax changes (Section 24 of the Finance (No 2) Act 2015) individual landlords with mortgages will be required to pay tax on turnover rather than the profit.

Represented by Omnia Strategy LLP,  the law firm  founded chaired by Cherie Blair in 2011, the group claimed that the tax changes were “unlawful, unreasonable and discriminatory” because they did not also apply to corporate landlords.

Mrs. Blair has previously claimed that the proposed tax changes would be challenged since they would “discriminate against landlords according to the European Convention on Human rights.” Speaking during today’s hearing, Mrs. Blair stated that the tax proposals would “unfairly result in cuts in income for ‘hard-working members of the public’ who had bought properties to rent in order to supplement their savings at a time when interest rates were low.”

Mr Justice Dingemans ruled that the legal challenge would fail rejecting claims that the changes would be contrary to EU legislation and anti-discrimination laws.  The judge added that the extent to which corporate bodies should be treated differently to individuals when it came to tax laws “raises political and economic questions, but not in this instance a legal one.”

In response to today’s court defeat, the landlord group remained defiant. In a joint statement lead claimants Steve Bolton, founder of Platinum Property Partners, and fellow landlord Chris Cooper claimed that the extra costs incurred by landlord due to the tax changes would be passed on to tenants through higher rents.

“We are outraged by the court’s decision. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of Section 24. From April 2017 the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50% over a three year period, will be felt far and wide. Sadly it will be tenants who are hit hardest; they are set to see unprecedented rent increases over the coming months and years, which will be a very clear and direct consequence of this ludicrous legislation.”

Despite the failure of a previous Parliamentary petition and today’s defeat, Mrs. Blair said that the coalition would fight on and “engage with the Government” more directly over the issue.

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Buy-to-let landlord court date set for 6th October

cherie-blair-changes-to-taxes-on-landlords-breach-human-rights

Buy-to-let Landlords taking the government to court to challenge tax relief restrictions will have their hearing at the Royal Courts of Justice on Thursday 6th October.

The group, led by the founder and chairman of Platinum Property Partners, Steve Bolton, and landlord Chris Cooper, seek to overturn former chancellor George Osborne’s decision to restrict the amount of tax relief a landlord will be able to claim on mortgage interest outlined in last year’s summer Budget.

The judicial review of Osborne’s proposals was financed by a crowdfunding campaign which followed a failed parliamentary petition to challenge the proposed tax changes.

Over £100,000 was raised by the pair who hired Omnia Strategy LLP,  the law firm  founded chaired by Cherie Blair in 2011, to act for them. At the landlord conference named the “Tenant Tax Summit” held in June to discuss the case,  Blair claimed that the former Chancellor’s tax changes warrant a judicial review since they “discriminate against landlords according to the European Convention on Human rights.”  Also speaking at the event was the Conservative Life Peer and former MP Lord Howard Flight who had written a letter to the Government “Why the Government is wrong to attack buy-to-let.”

Unless the legal challenge is successful, the government’s tax changes will come into effect in April 2017.

 

 

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Landlords Still Issuing Licenses to Occupy to Evade Deposit Protection Rules

Deposit Protection

Since the entry into force of the Tenancy Deposit Scheme many landlords and letting agents have devised ways of evading and ignoring deposit protection rules.

One common tactic which renters should be aware of is issuing tenants with a “licence to occupy” in place of an “Assured Shorthold Tenancy”.

A licence gives the right to occupy and is typically used for bed and breakfasts, hotels, holiday lets and some HMOs.  Often tenants only discover that a license has been issued when attempting to recover their deposit at the end of their occupation. However, despite being called a license, you may still have an Assured Shorthold Tenancy (AST) in the eyes of the law. In this event it may be possible to use typical AST measures to recoup moneys owed.

Do I have a License or a Tenancy?

A tenancy is created automatically if someone moves in and starts paying rent. Some landlords incorrectly issue licenses, either through inexperience or design to give tenants less rights than they would usually expect with an AST. A tenancy cannot be turned into a license merely by both parties signing a piece of paper headed ‘license agreement.’  A landmark case which defined the requirements for a tenancy as opposed to a license was Street v. Mountford in 1985. This stated that one has a tenancy if one:

  • pays a rent
  • occupies the property for a term
  • enjoys exclusive possession of land / property

These conditions do not apply if one does not pay rent  or if the occupier does not enjoy exclusive possession such as in a shared room or if cleaning and meals are provided as in a hotel.

The clearest way to identify the difference between the two [license and Assured Shorthold Tenancy] is exclusivity. If a tenant has exclusive use of at least one room in the property, and that room(s) is specified, this will usually be classed as a Tenancy Agreement. If the property is shared with more than one individual, this is more likely to be a Licence.

I believe I have been incorrectly issued with a license and my landlord has not protected my deposit, what should I do?

It may therefore be possible to claim damages from your landlord if they incorrectly issued you with a licence and failed to protect your deposit. According to current deposit protection rules, your landlord must register your deposit in one of the three government-approved deposit protection schemes within 30 days of the start of your tenancy.  The penalty for non-compliance is a fine of between one and three times the deposit amount.

 

 

 

 

 

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