New research shows UK tenants want assurance
Tenant Deposit Protection has been in law since 2007, but recent research shows that only 50% of tenants have received confirmation that their deposit has been properly registered.
So it’s no wonder that many tenants are unhappy, fuelling a culture of mistrust between tenants and landlords.
As all Better Letters know, happy tenants will often take good care of your property, report minor faults before they become big problems, and respect the terms of a reasonable AST.
So if you’re new to being a landlord, or thinking of becoming a landlord, what do you need to know about Deposit Protection Schemes?
You don’t have to lodge it, but you do have to register the deposit:
Since 2007, it has been illegal for landlords or their agents to fail to register tenant deposits. They must register them with an officially recognised Deposit Protection Scheme (DPS) and then, if there is cause to claim against the tenant’s deposit, that claim must be properly submitted to the DPS for approval.
There are two basic types of scheme: you can retain the deposit yourself (or your agent will), and register the deposit. In this case you are going down the insurance route, and to that there is a cost attached.
Or you can lodge the deposit with a DPS scheme and then apply to withhold specific sums, if necessary, to cover any repairs or replacements above regular wear and tear at the end of the tenant’s term.
Although you may have appointed a property manager to look after your property, you – the landlord – are ultimately responsible for making sure your legal obligations are met. So make sure you get confirmation from the letting agent that your tenant’s deposit has been properly lodged – and that your tenant has also received formal confirmation. Good practice, which we use, is to send the tenant the prescribed confirmation forms available from your DPS, and to have your tenant sign on receipt, so that you have a record.
There are three official Deposit Protection Schemes:
The UK Government recognises only three DPS for England and Wales (see here for more information). Make sure that you or your agent use one of these schemes.
There are penalties for not registering a deposit
Should you not correctly register your tenant’s deposit, your tenants can take you to court and there are several possible outcomes:
- Best case scenario: you will be ordered to return the deposit, or place it in a recognised DPS within 14 days;
- You may alternatively be ordered to pay up to three times the value of the deposit to your tenants.
- You may also find yourself unable to evict tenants when the tenancy ends.
We register all our tenants’ deposits, and we also facilitate access to a DPS for independent private landlords through our online ‘DIY Landlord’ services. With over 20 years’ experience of letting in and around Oxford, we’ve learnt that transparency, clarity and good communication are the keys to good relations with your tenants – and Better Letting.
If you’re looking for a property management company that will protect your interests, and those of your tenants, or if you’re a letting agent looking to join a reputable company, call me directly and find out what my company can do for you.
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