Posts with tag: tenancy deposits

Majority of Tenants Believe Their Deposits aren’t Protected in a Scheme

Published On: August 15, 2016 at 10:57 am

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Majority of Tenants Believe Their Deposits aren't Protected in a Scheme

Majority of Tenants Believe Their Deposits aren’t Protected in a Scheme

Worryingly, a new report has found that the majority of tenants (70%) believe that their deposits are not protected in a scheme and are instead kept by their landlord or letting agent.

The study, conducted by PropertyLetByUs.com, also found that just 50% of tenants have ever received confirmation that their deposit is held within a protection scheme, while three quarters are concerned that their landlord or agent will try to keep the deposit at the end of the tenancy.

It is estimated that £3.2 billion worth of tenants’ deposits are being held within the three Government-approved protection schemes, or by a landlord or letting agent.

The Government intends to reform the rental deposits system and is looking at what it can do to make sure that tenants have “proper consumer protection, including protection from landlords who withhold deposits unreasonably”.

The legal requirement for landlords or letting agents to protect tenancy deposits in an approved scheme was introduced in April 2007, as part of the Housing Act 2004, for all Assured Shorthold Tenancies (ASTs) in England and Wales where a deposit is taken. The law was created to raise standards in the lettings industry and ensure tenants are treated fairly at the end of their tenancy.

The Managing Director of PropertyLetByUs.com, Jane Morris, says: “Tenants are right to be concerned. While deposit protection schemes protect tenants, there is little or no policing to ensure landlords and agents are compliant. Our research shows that tenants simply don’t trust landlords and agents with their deposits, which is disappointing in light of the fact that the schemes have been around for many years. Agents and landlords have a legal obligation to put deposits in one of the three approved schemes within 30 days of receiving it.

“There definitely needs to be reform, and hopefully the Government will introduce new measures that will ensure that tenant deposits are fully protected.”

Landlords, remember that you must fulfil your legal duty to protect your tenants’ deposits within 30 days of receipt and provide them with the prescribed information.

Ensure a positive rapport with your tenants and successful lettings business by always keeping up with your responsibilities. Find out about the latest news and updates in the private rental sector at Landlord News.

Tenancy Deposits: What to do if Your Tenant Abandons Your Property

Published On: August 1, 2016 at 9:53 am

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Recently, a landlord and member of Landlord News got in touch with us about an issue he is having regarding tenancy deposits. We helped him, and others, work out what to do if your tenant abandons your property.

Paul wrote to us about a tenancy deposit issue – His two tenants had rented his apartment between June 2015 and July this year. They both paid a deposit, which was held by the agent he used to manage his property.

Tenancy Deposits: What to do if Your Tenant Abandons Your Property

Tenancy Deposits: What to do if Your Tenant Abandons Your Property

Following the check-out procedure, the agent reported to Paul that the apartment had been abandoned and was not fit to be let out again until it was cleaned and repaired.

Paul arranged for the property to be professional cleaned, which he paid for. His property is now let out again. However, he has submitted the invoice for the cleaning and repair work to his agent, and has been advised that it could take three months for him to receive recompense from the tenancy deposits.

Is this correct?

We asked tenancy deposit expert and the Director of Customer Relations at the Tenancy Deposit Scheme (TDS), Ben Beadle, to explain a landlord’s rights in this circumstance.

“In the case where a tenant is non-contactable and the deposit is registered with an insurance-backed scheme (i.e. the agent or landlord does not have the means to contact the tenants), the scheme is unable to adjudicate.

“It is an option for TDS members to follow our absconded tenant procedure, which members can choose to adopt if they wish, and involves them making their own assessment of the claim and distributing it on their finding. Members will normally require the landlord to reimburse the funds if the tenant later returns to dispute it. Although Alternative Dispute Resolution (ADR) timelines in the insurance-backed scheme are three months from the tenancy ending, a tenant in theory could return at a later date and the landlord should bear this in mind. The landlord will need to discuss this protocol with the agent. The agent is perfectly within their rights to await confirmation from the tenant or a court order, but hopefully a pragmatic solution can be reached, particularly if it is generally accepted that the tenant is unlikely to return.”

He adds: “The same is true if the deposit is held in a custodial scheme. Where one of the parties is not responding to a repayment request, there is something called the single claims process. This allows the party that is engaging to provide a statutory declaration to the scheme administrator to release the funds.”

Landlords, if you require any advice on tenancy deposits or other issues, do not hesitate to get in touch at hello@34.207.192.121.

Will the Tenancy Deposit be a Thing of the Past?

Published On: July 24, 2016 at 8:44 am

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Every year, £3 billion worth of tenants’ money is registered with one of three deposit protection schemes, as is legally required of landlords. But is there an alternative for savvy investors?

In most cases, a tenant’s deposit is handed back to them – less than 1% of the money is disputed. Reposit, a new service that could help landlords, believes that tenancy deposits not only put a financial strain on tenants in an increasingly expensive rental market, but also breed distrust.

“Ten years ago, you would have been laughed out of the room if it was suggested the idea that people would allow complete strangers from across the world to use their homes for accommodation while they were on holiday,” the firm notes. “Now, Airbnb has pioneered the sharing economy model and proved that, with a few exceptions, we can trust people.”

This led Reposit to ask the question: “So why do landlords take a deposit?”

It is generally understood that if a landlord holds a tenant’s deposit, the renter will be more inclined to look after the property.

However, Reposit has a different idea.

The new, innovative product seeks to abolish the need for a landlord to take a tenancy deposit.

The CEO of Reposit, Curran McKay, explains: “A tenant moving into their new rented home must find a month’s rent up front – six weeks’ rent as a holding deposit – as well as letting agency fees. On the other hand, a landlord wants some assurance they will be covered in the worst-case scenario. We believe trust, with a little help from Reposit, is all that it takes.”

So how does the product work?

Will the Tenancy Deposit be a Thing of the Past?

Will the Tenancy Deposit be a Thing of the Past?

  1. A tenant pays one weeks’ rent to Reposit as a fee, saving significantly on the average six-week deposit.
  2. If the tenant damages anything during the tenancy (save for fair wear and tear), or has unpaid rent arrears or cleaning costs at the end of the tenancy, they will be liable to pay this amount up to the maximum of six weeks’ rent to Reposit.
  3. Reposit will then pay the landlord or appointed agent the full owed amount.
  4. If there is a dispute, the firm has an independent Alternative Dispute Resolution (ADR) specialist to look at the case, using the same professionals as the three Government-approved schemes.
  5. If the tenant breaks anything, they pay for it. Simple!

Under the current deposit system, landlords must, by law, register the tenant’s deposit within 30 days of receipt, or face a fine of three months’ rent. This can also cost the landlord time and money.

Under Reposit’s system, landlord would not need to take a deposit, while still being protected with cover equal to six weeks’ rent as standard.

For more information, call Reposit on 020 3868 4070 or visit https://getreposit.uk.

Agent in Scotland fined for breaching tenancy deposit rules

Published On: July 8, 2016 at 11:24 am

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A lettings agency in Scotland has become the first north of the border to be reprimanded for breaching legislation on tenancy deposit securement.

The ruling against Colvin Houston Ltd at Kilmarnock Sheriff Court could have wider implications for the entire lettings sector in Scotland. This decision was the first time an agency in the country has been prosecuted under the Tenancy Deposit Schemes (Scotland) Regulations 2011.

Legislation

This legislation was introduced to make sure deposits were secured in independent tenancy deposit schemes and subsequently protected by third parties until repayment date.

Initially set up to prevent tenants from losing their deposits unfairly, the scheme had never previously been used to prosecute letting agents.

Primarily, housing legislation north of the border puts the responsibility for securing tenancy deposits firmly on landlords. However, the consumer protection legislation was used in this case to make an agent responsible for the responsibilities they carried out on behalf of their landlords.

Agent in Scotland fined for breaching tenancy deposit rules

Agent in Scotland fined for breaching tenancy deposit rules

Guilty

Colvin Houston Ltd, of Largs, pleaded guilty to the charges, relating to two specific tenancy deposits. These amounted to £925, which was not placed in a statutory deposit scheme.

In addition, the company was fined £750, reduced to £500 for an early plea.

Jen Paice, chief executive of SafeDeposits Scotland, said, ‘the statutory duty to protect a deposit is on the landlord even when a letting agent is used so it’s essential to seek confirmation that this is happening and alert the authorities where it is not. We hear first-hand about the success and benefits of the scheme in providing assurance for tenants and landlords alike.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/7/letting-agency-fined-in-pioneering-law-case-concerning-tenant-deposits

 

 

The Deposit Protection Service Donates £20,000 to Housing Charities

Published On: July 1, 2016 at 8:46 am

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The Deposit Protection Service (DPS) has donated a further £20,000 to three housing charities across England.

The UK’s largest provider of tenancy deposit protection has awarded £10,000 to Calderdale Smartmove in Halifax, £5,000 to Bosco House in Merseyside, and £5,000 to No Limits in Southampton.

The Head of Tenancy Deposit Protection at the DPS, Daren King, says: “We’re really glad to be able to support these three fantastic charities, all of which provide really important assistance to local people.

The Deposit Protection Service Donates £20,000 to Housing Charities

The Deposit Protection Service Donates £20,000 to Housing Charities

“Since the launch of our charity fund, the DPS has given £160,000 to housing charities, and we’re delighted to continue to fund such crucial work.”

The donation to Calderdale Smartmove will help provide secured bonds to private landlords and house 23 individuals and families.

The charity’s Craig George comments: “For many people, finding long-term accommodation is extremely challenging, and by giving more individuals and families a helping hand, we can make sure more people have somewhere safe and comfortable to live.

“We’re really grateful to the DPS for the funding, and it’s great to work with organisations that share Calderdale Smartmove’s ethos.”

Bosco House is a small charity that provides bed spaces to single, homeless men, many of whom have substance abuse problems, mental health issues and an offending background. The DPS’ donation will help open a new hostel in Sefton, which will house 13 homeless young people.

James Heller, a senior worker at Bosco House, reacts to the donation: “We are extremely delighted and grateful to the DPS for the funding provided for our new hostel.

“The funding provided will go a long way towards providing a safe and secure environment for our clients, and will contribute to rebuilding lives and combating homelessness in Merseyside.”

Southampton’s No Limits aims to relieve and prevent suffering caused by mental and physical ill health, or by social or economic circumstances among local young people, with an information, advice and counselling service.

The DPS’ donation will fund Homemaker Volunteer courses designed to teach skills that will improve the likelihood of young people staying in their homes, such as cooking on a budget, cleaning and money management.

The Team Leader for Floating Support at No Limits, Paul Salter, says: “We’re really grateful to the DPS for the money, which will really help us empower young people to truly enjoy their new homes.

“Some of the young people we work with have never had the welcoming, comfortable home that many of us take for granted, and we want these young people to feel like they have a home of which they can be proud.”

The DPS first established a fund in 2014 to assist charities that support the homeless and those who need help to live independently.

Many charities across the country have benefitted from donations from the DPS over the past two years.

Housing charities can apply for funds at www.depositprotection.com/charity. Applications for the next round of donations must be submitted by 30th September 2016.

Tenancy Deposits in Scotland £100 Cheaper than England and Wales

Published On: June 14, 2016 at 8:37 am

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The average tenancy deposit in Scotland is around £100 cheaper than in England and Wales, according to the Letting Protection Service Scotland (LPSS).

New tenants in Scotland paid almost £800 on average to their landlord in deposits over the last year, found the research.

When private tenants move into a new rental property, they typically pay their landlord a deposit to insure against damage or other costs incurred during the tenancy. By law, all landlords must protect tenancy deposits in a Government-approved scheme.

Tenancy Deposits in Scotland £100 Cheaper than England and Wales

Tenancy Deposits in Scotland £100 Cheaper than England and Wales

Between June 2015 and May 2016, the average deposit in Scotland was £794.11 – £102.89 (11.5%) cheaper than the average for rental properties in England and Wales over the same period, of £897.00.

The Managing Director of the LPSS, Julian Foster, comments: “Tenancy deposits give landlords peace of mind when they rent out a property, but they are usually large sums and are often the most financially demanding aspect of moving house.

“Nevertheless, when landlords protect the money with the LPSS, renters can also be assured that their money is safe throughout their tenancy, and that they’ll have recourse to free, impartial adjudication if there is a dispute when they move out.

“Both landlords and tenants need a deposit protection service that is fast, efficient, clear and communicative, and the LPSS has been entrusted with thousands of deposits since we launched in 2012.”

The LPSS data found that Edinburgh’s EH postcode has the most expensive tenancy deposits in Scotland, at an average of £908.44 – more than double the average for properties in Kirkwall’s KW zone, which is Scotland’s cheapest area, at £441.67.

Deposits for properties in Aberdeen, at £860.39, Kirkcaldy, at £794.11, and Falkirk, at £744.21, all average over £700, with the average in the Outer Hebrides, £464.00, and Dumfries and Galloway, £499.35, both below £500.

The most expensive tenancy deposits in the UK are found in Kingston-upon-Thames’ KT postcode, where tenants pay £1,715.25 – more than double the average for Scotland and almost four times the average deposit in Kirkwall.

The cheapest average deposit in England and Wales is in Liverpool, at £445.00, which is just £3.33 more expensive than Kirkwall’s.

Yesterday, a leading property expert called for the Government to abolish tenancy deposits altogether.