Nearly one in four landlords fail to protect their tenants deposits
Landlord legal advice firm Landlord Action has expressed concerns over figures which reveal that 38% of landlords fail to keep their tenants' deposits in an approved deposit protection scheme. Under government legislation, if a landlord rents out their property on an assured shorthold tenancy after 6 April 2007, a tenant's deposit must be put into a government-backed tenancy deposit scheme (TDS) within 30 days of its receipt. A failure to do so could result in landlords facing penalties of up to three times the amount of the deposit.
Amateur landlords have little knowledge of the law
After reviewing all their enquiries from the beginning of 2014, Landlord Action revealed that there are too many landlords who simply do not know enough about their responsibilities, recognising that amateur landlords, in particular, have very little knowledge of the legislation governing their business practices. Speaking about Landlord Action’s findings, founder Paul Shamplina indicated that, as a landlord, it is your business to know your rights and your responsibilities but that currently, this is simply not the case.
Many tenants now have more knowledge than their landlords when it comes to buy-to-let legislation, and landlords who do not act in accordance with their tenants’ rights are opening themselves up to a number of legal repercussions that could be costly to resolve. This includes finding it difficult to evict tenants under Section 21 of the Housing Act, as well as the possibility of landlords being sued by their tenants for failing to correctly protect their deposit, a growing problem that Landlord Action is helping landlords deal with more and more often.
Landlord Action’s findings are worrying
These findings reveal that, despite newly-imposed government measures, more still needs to be done to improve the rental sector and ensure that deposit protection services are utilised by the entirety of the private rented sector. Once landlords and/or their lettings agents have received a deposit, the 30 days they have to register it with an authorised TDS is just one aspect of their legal responsibility. In this same timeframe, they also have to issue their tenants with specific information, including the address of the rented property, how the deposit is protected, how to get the deposit back, and what to do if there’s a dispute over the return of the deposit.
Eddie Hooker, CEO of MyDeposits, one of the three approved deposit protection schemes, revealed that the majority of the legal cases they witness are related to landlords failing to correctly issue this information, and Hooker pinpoints this as an area where better understanding of the legislation is needed. All deposit protection schemes provide landlords and agents with access to the complete information they need to comply with, as well as the prescribed timescale for doing so, but it is up to the individual to ensure that they take the time to read and understand their obligations to their tenants.
Service you can trust
At CPS Homes, we always protect our tenants’ deposits promptly and correctly, so both landlords and tenants can be secure in the knowledge that their money will always be taken care of in accordance with government guidelines. Since our company was founded in 2000, we have gained accreditations from a number of industry-regulated bodies, including ARLA and Landlord Accreditation Wales, meaning that the way we work is tried, tested and always in accordance with subscribed codes of practice.
If you’re a landlord looking for an experienced agent to manage your property or a tenant searching for a new home in Cardiff with an estate and lettings agent you can trust, and who puts their customers’ needs first, then get in touch with us today!
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
