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.