HAPPY 10TH ANNIVERSARY TO DEPOSIT PROTECTION
The UK government introduced the Tenancy Deposit Protection legislation in April 2007, 10 years ago! 2 Government-backed schemes were launched, two types of protections: Insured protection and Custodial protection. TDS & mydeposits are primarily insurance-backed schemes which allow Landlords or their agents to keep hold of deposits themselves in exchange for an insurance fee. DPS is primarily a custodial scheme, which means that it is free and the scheme takes receipt of the funds
Prior to the introduction of Deposit Protection Legislation in April 2007, many tenants faced difficulty when requesting their deposits back from Landlords at the end of their tenancy. The collection and return of deposits were not regulated which meant that Landlords had the upper hand when distributing the tenants deposit. Prior to April 2007, if a tenant wanted to contest a deposit deduction they would need to escalate the matter through the courts. Due to the time consuming nature of legal proceedings and costs involved, many tenants were forced to accept defeat whilst unscrupulous Landlord’s /Agent’s pocketed their money.
The Government’s decision to introduce the new law was a further step towards generating higher standards in the lettings industry. The schemes exist to protect unfair mishandling of tenancy deposits and relieve the stress of deposit cases going through the courts system.
The launch of Deposit legislation has given tenants more security and support when it comes to their deposit. Tenants are now able to negotiate the release of their deposit on fair terms through a deposit scheme. Tenants have benefited greatly from the legislation as the schemes arbitration service is free to use.
Agents and Landlords are forced to provide substantial evident of any claims. Whilst the schemes have been beneficial to the Tenants, Landlords have somewhat lost control of the deposit’s distribution process. It is now harder for Landlords to recoup costs for damages without hard-core evidence and proof of damage (In the form of an Inventory and Check out).
An Independent Inventory, check in and check out process is the best protection a Landlord can have to ensure any claims for damages at the end of the tenancy will be upheld.
The legislation has also imposed strict penalties on Landlords if they do not comply. If a deposit is not placed within one of the approved schemes 30days after receipt, the Landlord may be penalised by: (1) paying a penalty payment of three times the deposit, and (2) invalidating notice to terminate the tenancy.
Out of all three schemes, Househandlers use the DPS to protect all of our tenant’s deposits. We have been using the DPS since our launch 8 years ago. Househandlers have a high success rate in returning deposit balances back to tenants without using the disputes process. We prep all of our tenants at the start and end of their tenancy on how to handback the property over to us. It is important that our tenants have a clear understanding of what is required of them on exiting the property in terms of cleaning and repairs. These steps have helped us prevent lengthy disputes.
Funny finds from the team at DPS (Deposit Protection scheme) over the last 10 years:
There’s a goose loose about this house!
‘Six geese a-laying may make for a whimsical Christmas gift, but they’re less fun when they’re left in your utility room when your tenants move out. Needless to say, this Landlord had goose-bumps for quite a while’.
The Knicker Tree
‘A group of student tenants left something a little different in the garden of their property: several pairs of women’s underwear hanging from the branches of a tree. We never got to the bottom of why they did this!’