Protecting someone else’s deposit?

by Readers Question

15:36 PM, 6th August 2014
About 4 years ago

Protecting someone else’s deposit?

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Protecting someone else’s deposit?

Good Day All. Protecting someone else's deposit

I have several deposits lodged with the DPS. My girlfriend is about to rent out her flat, and although her name will be on the AST, she will receive rent and be the landlord from the legal standpoint, it makes sense for me to be the acting landlord in terms of actually running the tenancy. In effect, an unpaid agent.

Can I lodge the deposit in my DPS account?

The DPS operative explained, with admiral and refreshing honesty, that he didn’t know the legal requirement, and that it didn’t make any practical difference to the DPS whose deposit it was, as long as there was proof that a protected deposit was associated with a specified tenancy.

This is what I thought, as I also look after my parents’ house as unpaid acting landlord/agent, as they live abroad.

I then asked the NLA helpline, and the opinion is that I’m in the wrong, and since the legal owner of the property is the landlord, the landlord/owner must have a deposit scheme account.

I’m surprised at this, since I’ve had letting agents lodge deposits in their name for my flats, one managed and one tenant-find only.

Did these agents have some legal standing as agents, thus allowing them to do this, which I don’t have as an “unofficial” unpaid agent?

What does the membership think?

Many thanks

Doug



Comments

Mark Alexander

15:39 PM, 6th August 2014
About 4 years ago

Hi Doug

Until October this year the lettings industry is not regulated by statute. After that, all letting agents will be required to be a member of a redress scheme and that will entail them having to have professional indemnity insurance.

Until then you're in the clear but after that you current arrangements probably won't be in anybody's best interests.
.

Romain Garcin

16:11 PM, 6th August 2014
About 4 years ago

Don't take my word for it but I believe that you acting as agent and protecting the deposit would be fine for 2 reasons:

1. That's what professional agents do: they have an account in their name and protect deposits in their names, (as you pointed out)

2. the definition of 'landlord' with respect to deposit protection in the Housing Act 2004 says that it includes "a person acting on his behalf in relation to the tenancy".

The only thing is that, as Mark mentioned, from October agents will have by law to be member of a redress scheme.

Gary Nock

23:11 PM, 6th August 2014
About 4 years ago

Whose name is on the Prescribed Information as The Landlord and has your girlfriend signed it as the Landlord or have you?

Doug Green

9:57 AM, 7th August 2014
About 4 years ago

Tenancy hasn't commenced yet but she, as the flat owner and legal landlord, will sign the AST, prescribed info and anything else that needs signing. Rent will go to her account, her address for contact will go on the AST.

I'm working on the basis that the deposit will be associated with a named tenant, at a specified address, on a specified date, in the deposit scheme database, so compliance with deposit protecting rules will be established. The question is does it matter that I would be in effect appear to be the landlord in the DPS database, since the deposit is protected under my DPS account.

Regards - Doug

Gary Nock

10:31 AM, 7th August 2014
About 4 years ago

As Romain states above, agents protect tenants deposits all the time. In my agency the DPS Account is in our name but all the Prescribed Information contains the landlords details as per the DPS Template ( noticed the other day there is a drop down box now to enter it all) So as long as you follow that and do not get tempted to enter your own contact details etc then its not a problem.


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