5 April 2007
With a day to go until the introduction of mandatory tenancy deposit protection, Tenancy Deposit Solutions Ltd (TDSL) has seen rapid growth in the number of landlords and agents registering for its insurance-backed scheme.
However, tenants remain largely unaware of the new rules, with just 15% saying they knew of the introduction of tenancy deposit protection, according to research undertaken on behalf of TDSL.
David Salusbury, chairman of TDSL, says: "From Friday, a landlord who takes a deposit from a tenant in England and Wales under a new assured shorthold tenancy starting on or after this Friday will be required by law to protect it under a government-approved tenancy deposit protection scheme. While familiarity among landlords is growing steadily, tenants appear to have little knowledge of the new regime. Fewer than one in seven tenants has even heard of it. It's important that tenants get up to speed and know their rights - after all, tenancy deposit protection is for their benefit."
TDSL's research indicates that 83% of tenants are usually asked for a deposit. The average deposit amounts to £700.
David Salusbury says: "Taking a cash deposit, usually equivalent to one month's rent or sometimes more, is good practice in the private rented sector. It is one of the few safeguards available to the landlord."
The penalties for non-compliance with deposit protection are severe. If the landlord fails to protect the deposit within 10 days, the tenant can apply for a court order requiring it to be protected. If the court is satisfied that the deposit is not being held in an authorised scheme, it can order the landlord to repay the deposit. The court can also order the landlord to pay the tenant three times the amount of the deposit.
The research shows the most common reasons for deposits being withheld are cleaning (44%), damage to carpets (21%) and damage to furniture (12%).
Main reasons for deposits being withheld:
The research also highlights the fact that an inventory is not always agreed between the parties. According to tenants, almost half of landlords (45%) do not provide an inventory and only a very small proportion (2%) included photographs showing the condition of the property, its fixtures and furnishings at the beginning of the tenancy.
David Salusbury says: "An inventory is important and a photographic record of the property can help to avoid unnecessary disputes at the end of the tenancy. With the advent of tenancy deposit protection, these items become even more important."
"The Government has introduced legislation to weed out rogue operators. Co-operation between landlord and tenant is the best way forward. TDSL, as the leading insurance-based scheme designed primarily for landlords, is well placed to enjoy the confidence of all parts of the sector. We are committed to helping a smooth transition to the new regulatory regime." Landlords and agents can register with Tenancy Deposit Solutions and find out more by visiting the TDSL website www.mydeposits.co.uk.
* The professional bodies are:
For further information and case studies of tenants, landlords and letting agents who have been using mydeposits.co.uk, please contact:
Tel: 020 7840 8906
Mob: 07508 031 084
Notes to editors:
Mydeposits is the trading name of Tenancy Deposit Solutions Limited, a company jointly owned by the National Landlords Association and HFIS plc T/A Hamilton Fraser Insurance (the Scheme Administrator) to deliver an insurance-backed tenancy deposit protection scheme under contract from Communities & Local Government. Landlords wishing to use this scheme are required to register with the Scheme Administrator. They can find out more and register by visiting www.mydeposits.co.uk. Registered members of the Scheme are able to protect and unprotect deposits at the beginning and end of tenancies. Fees are tax-deductible. In the event of a dispute at the end of the tenancy agreement, both parties are offered access to alternative dispute resolution (ADR). This procedure will be evidence-based, relying on documentation and records.
About Hamilton Fraser Insurance:
Hamilton Fraser Insurance is the trading name of HFIS plc, a long-established insurance broker, authorised and regulated by the Financial Services Authority. Hamilton Fraser provides insurance services to clients throughout the UK and is located in New Barnet, Hertfordshire. Hamilton Fraser is a major player in the highly specialised property insurance sector, and offers a tailored product to both residential landlords and managing agents. The NLA and Hamilton Fraser have a long-standing relationship, with Hamilton Fraser offering its range of Landlord Solutions insurance products to members of the NLA.
About the National Landlords Association:
The National Landlords Association (NLA) exists to protect and promote the interests of private residential landlords. With almost 20,000 individual landlords from around the United Kingdom and over 90 local authority associates, it provides a comprehensive range of benefits and services to its members and strives to raise standards in rented accommodation. The NLA seeks to safeguard landlords’ legitimate interests by making their collective voice heard by local and central government and the media. The NLA seeks a fair legislative and regulatory environment for the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities.