Deposit Protection - How has it faired since its introduction?
When new deposit protection legislation was brought in, in April 2007, the effect it would have on the rented sector was a hot topic amongst all those with an interest in the ruling. Almost four years on we now have a far greater understanding of where deposit protection works well, but also where it's failing.
Much has been made in recent press of landlords trying to avoid protecting the deposit altogether, but how fair is deposit protection as a whole and is there a reason to try and avoid it?
There is no doubt that the move for deposits to be protected is a positive one and sends out all the correct messages, however how easily can genuine tenant damage be identified and compensated under the schemes?
In an ideal world, the tenant, landlord and agent would all agree the condition of a property before and after occupation and come to an amicable agreement over the amount of deposit to be refunded. Whilst this does happen, sometimes people's views do differ and one person's 'clean' oven could be another person's 'hygiene hell'. So what happens when claims by the landlord are disputed?
All of the deposit schemes offer a free adjudication service to both landlords and tenants, rather than a landlord seeking compensation via a small claims court. Both parties are required to state how much of the deposit they feel they are due back and provide as much clear and concise evidence as possible to back up their claim. On the face of it, the service provides the ideal remedy if a resolution cannot be made, however there are several potential short fallings.
What time frame will the decision be made in?
The adjudication process can take two or three months. During this time the deposit will remain with the deposit scheme, regardless of the service you have chosen to use. Meanwhile, as the landlord will require the rental income during that time, they will carry out the work needed to fix the damages left behind by the previous tenants, meaning they have to bear the cost of any work done until such time a decision is made. Likewise, tenants have to wait, regardless of any requirement they may have for paying a new deposit on a new property.
Evidence?
Although the onus is on both landlord and tenant to both provide evidence, it is ultimately only the landlord who is able to sway the Adjudicator's mindset from an award to the tenant. Whilst digitally-dated photographs will go someway to providing damage, without a signed check-out by the tenant agreeing that such damages were found, claims can still be dismissed. Practically speaking, how many tenants would agree to meet at the property and sign a document, knowing full well that they have caused damage? Not many, which causes a great degree of difficulty when claiming for certain items.
Deposit protection is necessary step towards regulating the Private Rental Industry and ensuring tenants are treated fairly by their landlords and agents. The practicalities of running such a system, however, have not yet been fully addressed and are still weighted in favour of tenants overall. For now, landlords may, at times, be better advised to address damages in unusual cases, such as absent tenants, through the Small Claims Courts rather than the free adjudication service available.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
