New Deposit Service launched

by Paul Shamplina

10:36 AM, 9th September 2014
About 4 years ago

New Deposit Service launched

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New Deposit Service launched

As many as 38% of landlords calling the Landlord Action legal helpline for advice on evicting a tenant have failed to place their tenants’ deposits in a government recognised scheme within the prescribed 30 days of receiving it, or have not even heard of the scheme which came into force back in 2007.

Landlord Action has now launched a deposit service to deal with these cases. Paul Shamplina Landlord Action

Reviewing enquiries from the start of this year, there is still a major problem with amateur landlords (and some agents) having very little knowledge of this important piece of legislation, which is seeing an increasing number of landlords facing penalties of up to three times the value of the deposit, which is then awarded to the tenant. The landlords also face penalties if their agent failed to comply with the legislation, which adds tension to the relationship between landlords and their agents.

There are too many landlords that still do not know enough about being a landlord and their responsibilities. Many are failing to comply with deposit protection rules and this is having a knock-on effect when landlords wish to evict through Section 21. The simple fact is, ignorance will not solve the problem.

The only way a landlord can legally evict a tenant who will not move out voluntarily (and who is not in arrears or in breach of their tenancy agreement) is via a court order for possession, but in order to obtain this, a landlord must first return the deposit. Furthermore, we are receiving more and more phone calls from desperate landlords who are being sued by their tenants for compensation for not protecting the deposit.

It seems to me, that tenants are becoming savvier than landlords when it comes to buy to let legislation. Landlords, this is your business, you must be fully versed in your responsibilities.

Solicitors are reluctant to take on these cases as there is no defence against it and it is purely down to the judge’s discretion. In response to the rising number of enquiries with deposit issues, Landlord Action has launched a fixed fee deposit claims mitigation service for landlords, to act on the landlord’s behalf in dealing with the court paperwork and also attempting to reduce the level of penalty the landlord faces.

Eddie Hooker, CEO of MyDeposits, said “the findings of Landlord Action are somewhat worrying, especially as all three schemes have seen a healthy year on year increase in the number of deposits being protected. Having said that, we should not become complacent and there is clearly more work to be done in ensuring that deposit protection is embraced by the entire private rented sector. Landlords and agents should be aware that protecting the deposit with an authorised scheme is only one part of their legal responsibility. The other requirement is to correctly serve the Prescribed Information to the tenant and this is definitely an area where better understanding of the legislation is needed. The majority of legal cases we see surround the incorrect issuing of the Prescribed Information, or failing to issue it all. All schemes have extensive information on how to comply with the legislation, including timescales on their websites and we urge letting operators to ensure they understand their obligations”.

Please CLICK HERE if you wish to see the new Deposit Service

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

Neil Patterson

10:40 AM, 9th September 2014
About 4 years ago

I find 38% of Landlords needing your help have not protected the deposit to be a staggering statistic this amount of time on from the legislation being put into place.

Well done Paul for continuing to help landlords even in sticky situations.

Alan Loughlin

10:53 AM, 9th September 2014
About 4 years ago

the deposit scheme is so biased as to be unfit for purpose, it serves no useful purpose for the landlord at all, we just avoid it and opt for a fixed fee instead, nothing to protect, no fines for not doing so correctly, no fighting over the returning it, no hassle and money in my bank upfront.

Mike

11:35 AM, 9th September 2014
About 4 years ago

Reply to the comment left by "Alan Loughlin" at "09/09/2014 - 10:53":

Hi Alan, have I missed knowing about "fixed fee " instead of taking deposit. How about for those landlords who took deposit from their tenant and did not know or failed to protect it through approved Govt. body, can they not now return the deposit in full and amend any paperwork to that effect, as if no deposit was taken from the onset of the tenancy, to avoid any future claims or other problems by tenants for not protecting their deposit earlier, within 30 days. my view is that if you failed to protect a deposit in time, you might as well return it now, instead of protecting it by depositing it with an approved body, as that would be useless since a Court would reject that as it was protected after 30 days, so one might as well return it to the tenant as the risk is 3 times the deposit otherwise. Your comments would be appreciated. Thanks in advance.

Carol Thomas

11:35 AM, 9th September 2014
About 4 years ago

Reply to the comment left by "Alan Loughlin" at "09/09/2014 - 10:53":

How does a"fixed fee' work? I've not heard of it before.

Alan Loughlin

11:50 AM, 9th September 2014
About 4 years ago

simple really, we take no deposit, instead opt for a fixed fee, payable upfront, it varies with the property, the smallest units we rent, a one bed apartment is £295.00, this is clearly stated as a fee on the contract, and that it is non-refundable, also the deposit is stated as zero to avoid any confusión. we put this money aside and when a tenant leaves it pays for the clean (usually £50.00) and the rest goes towards redecorating or replacing anything needed. I keep a check and usually the money covers all cleans, all decorating, and all small repairs. the advantage is there is no paperwork to do, money is already in the bank, no risk of having to pay 3x deposit back for a minor admin error, and no fighting for part of deposit back for non cleaned property. really does amaze me that everybody follows the traditional route, nobody thinking outside the box. strange.

Carol Thomas

12:01 PM, 9th September 2014
About 4 years ago

Reply to the comment left by "Alan Loughlin" at "09/09/2014 - 11:50":

Thanks Alan, I don't understand why we all don't do this either! However, I'm with a agency now and they do it all for me. If I was ever to go back to managing my own properties again, I would definitely go down this path.

Neil Patterson

12:06 PM, 9th September 2014
About 4 years ago

Without a deposit placed at risk is there not less of an incentive for the tenant to look after the property?

Adam Hosker

12:06 PM, 9th September 2014
About 4 years ago

I don't understand paul; ahve you established a Scheme? or a service to deal with landlords that have not acted within current legislation and protected deposits?

Alan Loughlin

12:13 PM, 9th September 2014
About 4 years ago

yes, but in practice it seems to make no difference, before doing this we were sick of the deposit scheme, tenants just did not pay last month`s rent and said keep the deposit, that left us with a clean-up bill and no effective protection anyway, and if a tenant is going to do real damage what will one month`s rent cover? very little.
anyway this is each person`s choice, but for certain we will not be going back to the deposit system, it is totally useless, a lot of work and risk for nothing.

Fred Bloggs

12:53 PM, 9th September 2014
About 4 years ago

A recent tenant of mine has put it in writing to me that she would rather me not place her deposit in any Government recognized scheme of which I duly obliged.
How do I stand on this ?

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