Deposit Protection – look out landlords, the vultures are circling

I think its odd that landlords are complaining about companies who manage to get money(deposits) back. Ok so there is an issue about paying a third party claims company but in reality if they have not protected the deposit they can be fined by up to 3 times by a judge,

Tenancy Deposits have been around for 6 years now so there is really no excuse not to have protected the deposit. Unless of course the game plan was to keep the deposit anyway!

If the law is broken then Landlords are open to a number of potential claims whether thats from solicitors or claims management companies.

Simple answer is to follow the rules and then there would be no claim.

My experience of dealing with Landlords for eviction purposes is that they have in many cases dealt with the paperwork incorrectly .

Its time the industry was cleaned up both from a legal eviction perspective right up to how Landlords operate their businesses.

I also think that tenants can get away with too much especially with regard to rent arrears after leaving,damage to property and anti-social behaviour that becomes a Landlord problem not a police problem.

If there was an industry standard of every Landlord seeking to talk to the previous Landlord then a lot of this could be reduced.

Whilst I appreciate that there are some landlords who do not give a hoot about deposit protection, the vast majority of us do and try to do it right. But when you get things like the Superstrike case, and the recent one where a letting agent signed a Deposit Protection Form on behalf of the landlord and had a possession case thrown out, then it muddys the waters somewhat. Do agents get the landlords to sign everything - Tenancy Agreement, Deposit Protection Forms, Inventories rather than sign on their behalf? Mydeposits states on the signature part "Landlord/Agent" whilst the DPS template just states "Landlord". So some smart a**e legal exec working for a claims firm exploits this ambiguity and sues good landlords.

@Simon - with respect I think you are missing the point.

I agree that landlords need to get their acts together and follow the law, I certainly support that. However, having been a finance broker in a former life and having had experience of "no win no fee" PPI companies I have more of an insight than most people posting here of being on the receiving end of ambulance chasers.

See the post from Anthony John at 10:15 am today (up three).

These "no win no fee" claim companies just fire out aggressive letters which will scare the crap out of most landlords whether they have done something wrong or not. In a previous life I founded a company which went on to arrange circa 50,000 buy to let mortgages. We NEVER sold PPI insurance but rarely does a day go by that we receive a claims letter from an ambulance chaser legal firm DEMANDING that we provide them with the client file in relation to a mis-sold PPI claim.

Are landlords ready for this?

PS - I also agree with Gary - it's the grey areas and ambiguity that the vultures will be targeting in the hope that naive or cash strapped landlords will get scared and settle before cases ever get to Court.

There is no business for these people if the Landlord follows the rules. If landlords settle for claims out of court for something that they have not done then again it reflects on the way they run their business.

I understand with the recent case law that there could be some problem with tenancies that have gone onto a periodic but I am sure that is going to get challenged.
It could mean that Landlords would have to protect the deposit each month in a periodic if you follow the judgement precisely. That would be a nonsense.

However I revert to what I been saying. If Landlords have taken deposits and not protected at all then there is no excuse.

If I were the deposit scheme owners I would pay the Landlord to appeal at the Supreme court on the periodic issue as it will effect their business. Landlords will not want to burden themselves with administrating a deposit each month.

In terms of your PPI companies the MOJ is quite strict on companies submitting claims that do not have evidence and you should make them aware of the practice.

A more serious debate should be about the proposal to bring human rights to eviction processes,letting fees being banned(backed by Shelter) and the Universal credit changes.

These are real issues that effect Landlords who operate professional businesses.

Having spent years as a Landlord and running an eviction company I can say that too many do NOT follow the regulations.

My general advice is follow the rules even if you think they are unfair(as I do).

Lets campaign for better legislation and clearer ways to protect good Landlords and tenants.

Reply to the comment left by "Simon" at "05/07/2013 - 12:03":

I've just had the "heads up" that government should be issuing the much needed clarification we need relating to the Superstrike case next week 🙂

Simon;
Ever heard of landlordreferencing.co.uk.
This is a site which enables LL to talk to eachother about their former tenants.
Its been going for about 4 years now!
This is the de facto national standard for LL to talk to eachother.
I am surprised when you suggest that some LL ignore deposit regs.
They must have some pretty thick tenants if that is the case.
If I had a tenancy with a LL who didn't do things correctly.
I would just wait 32 days; register a dispute with the court; claiming 3 x deposit and the deposit amount.
Then I'd stop paying rent and wait to be evicted.
With rent at £1000pcm I would make about £10000 profit.
There have to be other savvy tenants out there!?
These idiot LL have just been lucky not to come across a clever tenant.

Reply to the comment left by "Paul" at "06/07/2013 - 04:35":

I agree Paul. And yes they really are not protecting deposits in large numbers which is why when the law changed to 30 days the schemes saw a climb in the LL registering them for the first time. LL need to get with it I am afraid.
I found a lot using asts bought from newsagents...and then they wonder why they cant evict tenants.
I,ll check out the LL ref site.thanks simon

This deposit claim company seems to have a certain weakness.
As we all know time is money and any time wasted chasing bogus deposit claims will cost such company money.
Would be very sad to watch grown men chasing non existent business.

I have stopped taking deposits and just uplifted my flats by £25 or £30 per month which I give back the majority at the end of the year as a "Clean flat bonus".

£25 for 12 months get £200 back and £30 for 12 months get £250.
The extra £1000 pa ( across my 10 flats is onto the bottom line).

I also mention that if there is any significant damage the it will be court and a deposit would have been a token anyway.

No issues yet ...touching wood.

Reply to the comment left by "Simon " at "05/07/2013 - 12:03":

The law states taht when a tenancy becomes statutory periodic, then that is a new tenency; it does not state that every period is a new tenancy.
Therefore there is no implied requirement to protect deposit every period, just once when it becomes SP.

[Housing Act 1988 section 5; in particular 5(2) and 5(3)(a)]