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Press Releases Landlords
National Landlords Association, 28th August 2007
More than 3 out of 4 landlords have yet to register for Tenancy Deposit Protection
For whatever reasons, a large majority of landlords have yet to register with a government-approved tenancy deposit scheme, says the National Landlords Association. Whist it is estimated that around 150,000 landlords have made the move to register with a scheme, it is clear that a large majority have yet to do so.
Given the new legislation has been in place for almost 5 months, the number of landlords who have yet to register with a scheme could be a cause for concern. While landlords with tenancies that started before the scheme was launched on 6 April do not need to protect deposits until a new tenancy is created, there may be other, more worrying, reasons for the relatively slow take-up.
Tenancy deposit protection applies to deposits taken under Assured Short-hold Tenancy Agreements (ASTs) in England and Wales. The NLA believes that some landlords previously using ASTs could now be choosing to use alternative tenancy agreements, such as assured tenancies, in a move to avoid deposit protection.
David Salusbury, chairman of the NLA, says: "This could prove to be a risky strategy for landlords. Assured tenancies, as distinct from assured short-hold tenancies, make it very difficult for landlords needing to recover possession of their property. For most landlords, avoiding the requirement to protect a deposit at the expense of compromising their ability to get the property back makes little business sense."
There is also anecdotal evidence that some landlords who formerly took deposits are now choosing not to, thereby exposing themselves to additional risk in the event their tenants damage the property or default on the rent.
The NLA regards the taking of a deposit from the tenant as best practice. It shows good faith on the part of the tenant and is an important safeguard available to landlords. Not only does it encourage tenants to respect and look after the property, it gives landlords some recourse if they do not. Dispensing with a deposit, except in exceptional circumstances where the tenant has a long term track record with the landlord, is a strategy which the NLA would not advise landlords to follow. That said landlords must realise that a deposit is the tenant's money and must be properly and fairly accounted for at the end of the tenancy.
There may be a minority of rogue operators who are deliberately flouting the law and others who remain in ignorance of the law. By taking a deposit and ignoring the legal requirement to protect it with a government-approved scheme, such as Tenancy Deposit Solutions Limited, landlords are committing an offence - whether they are aware of it or not.
David Salusbury says: "The penalties for non-compliance with tenancy deposit protection are severe - a court can order the landlord to repay the deposit plus a penalty of three times the amount of the deposit. On top of that, the landlord will also be unable to apply to the courts for fast- track possession under Section 21of the 1988 Housing Act."
"Dispensing with the AST, failing to take a deposit or, even worse, taking a deposit but not protecting it - these are all actions which could leave landlords seriously out of pocket, not to mention they could be breaking the law. It's vital that those landlords who are not using a government-approved tenancy deposit protection scheme realise it is in their interest to do so if they continue taking deposits on an AST."
National Landlords Association, 6th March 2007
Tenancy Deposit Solutions Ltd announces fees for tenancy deposit protection scheme
Tenancy Deposit Solutions Ltd (TDSL) has announced its tariff for landlords who join the tenancy deposit protection scheme.
TDSL, which is sponsored by the National Landlords Association (NLA) and administered by Hamilton Fraser Insurance, is designed for landlords who wish to continue to hold deposits themselves, rather than transfer them into a custodial scheme.
It will be mandatory for all landlords who take deposits for assured shorthold tenancies in England and Wales on or after 6 April 2007 to join a Government-authorised tenancy deposit protection scheme. Landlords will be legally required to protect the tenant's deposit and provide details of the scheme to the tenant within 10 days.
The fees will be as follows:
NLA members: Scheme Joining Fee (per landlord) - £47.00, Protection Fee (per deposit) - £26.00 (first 4 deposits p.a., £30 thereafter), Annual Scheme Renewal Fee - £14.70.
Non NLA members: Scheme Joining Fee (per landlord) - £58.75, Protection Fee (per deposit) - £30.00, Annual Scheme Renewal Fee - £14.70.
Fees include VAT at the applicable rate
David Salusbury, chairman of TDSL, comments: "As we prepare ourselves for implementation of tenancy deposit protection on 6 April, the announcement of fees is an important milestone. We believe landlords will find the tariff attractive. Our insurance-based scheme will enable them to continue to hold deposits as at present, which gives a landlord a form of security against any damage that may occur during a tenancy. Many landlords feel that this stability contributes to the long term success of their business. Transferring funds into a custodial scheme could be a cumbersome alternative, particularly for a landlord with a substantial property portfolio."
"Paying a modest fee to protect a deposit is far better than being ordered by the Court to pay the tenant a substantial penalty of three times the amount of the deposit. That could amount to a massive £1,761 for each deposit that is not protected, based on the average deposit of £587."
Landlords can register with Tenancy Deposit Solutions to protect a deposit and find out more by visiting the TDS website www.mydeposits.co.uk.
For further information, landlords, tenants and other interested parties should visit: www.mydeposits.co.uk or www.communities.gov.uk.
National Landlords Association, 22nd February 2007
Are Landlords ready for April 6?
Residential landlords who do not observe new tenancy deposit protection rules will have to pay substantial fines - to their tenants
Landlords in England and Wales who fail to comply with the new law requiring them to protect tenants' deposits could be ordered by the courts to pay the tenant a penalty of three times the amount of the deposit.
With total deposits held by landlords amounting to an estimated £1.2 billion and 40% of the 2.2 million tenancies rolling over each year , the potential windfall for the nation's renters could amount to tens of millions of pounds.
David Salusbury, Chairman of the National Landlords Association, sponsors of Tenancy Deposit Solutions Ltd, says: "The majority of landlords treat their tenants fairly and return deposits promptly, less the cost of any legitimate damage or repairs. However, the Government is taking a tough line to weed out rogue operators and the new laws will apply to all landlords, large or small, who let properties under an Assured Shorthold Tenancy after 6 April 2007 and take a deposit. There is no escape."
Under the regulations a landlord will be required within fourteen days to provide details to the new tenant of the scheme used to protect the tenant's deposit. If the landlord fails to protect the deposit, the tenant can apply for a court order requiring the deposit to be protected, or for the prescribed information to be given to him or her. If the court is satisfied that the landlord has failed to comply with these requirements (or is not satisfied that the deposit is being protected by a government-authorised scheme), the court must order the landlord to pay an amount equivalent of three times the deposit to the tenant within fourteen days, and either repay the deposit to the tenant or protect it in the authorised custodial scheme. The landlord would no longer be able to use notice-only ("Section 21") grounds for possession until the deposit in question was protected.
David Salusbury continues: "This penalty applies to each and every tenancy, and each and every deposit which is not protected. For a portfolio investor with a hundred or more properties, non-compliance could be extremely costly indeed, not only financially but also in terms of reputation: this would be very damaging to a landlord's business. With an estimated £1.2 billion held by way of deposits, in a worst case scenario we could see millions, maybe even tens of millions of pounds, being paid by landlords to tenants in penalties. Indeed, this could put some landlords out of business."
Landlords who continue taking deposits from tenants need to join one of the three government-authorised schemes. No other tenancy deposit protection scheme will be permitted under the law. The insurance-based scheme provided by TDSL is sponsored by the NLA and administered by Hamilton Fraser Insurance, and is the only scheme specifically designed to enable landlords to hold tenancy deposits throughout tenancies.
"As the UK's leading landlord association, we have a clear commitment both to raising standards in the industry and ensuring that landlords are fully aware of their rights and responsibilities. The financial implications of non-compliance with the new law are serious and this should be a wake-up call for landlords who have not yet prepared themselves for tenancy deposit protection."
For further information, landlords, tenants and other interested parties should visit: www.mydeposits.co.uk or www.communities.gov.uk.
National Landlords Association, 15th February 2007
Tenancy Deposit Protection - with just 50 days to go, it's no use landlords burying their heads in the sand
800,000 residential landlords across England & Wales must prepare for the introduction of deposit protection on 6th April
With the implementation of new laws requiring private landlords who take deposits from tenants to join an approved tenancy deposit scheme now just 50 days away, the number of landlords who have signed up for the Tenancy Deposit Solutions scheme is rising steadily. But there remain many landlords who are unaware of the new rules which will affect the £1.2 billion of tenants' money currently held by landlords.
David Salusbury, Chairman of the National Landlords Association, sponsors of government-authorised insurance-based Tenancy Deposit Solutions, says: "Burying your head in the sand is not a viable option. From 6th April, any landlord who takes and holds a deposit in respect of an Assured Shorthold Tenancy will be required to protect it through a government-authorised scheme. It will be the law of the land, and there is no escape short of not taking a deposit. The penalties for non-compliance are severe."
Landlords can register with Tenancy Deposit Solutions and find out more by visiting the TDS website www.mydeposits.co.uk.
"Not surprisingly, we've seen the strongest interest and the greatest level of preparedness among members of landlord associations. However there is clearly a large number of landlords who have little or no knowledge of tenancy deposit protection and are not prepared at all. Some may intend to rely upon a letting agent to ensure that the deposits are protected in accordance with the law, but according to information from Communities & Local Government, only 23% of landlords use an agent . So there is clearly a very substantial number of the 800,000 residential landlords in this country who need to learn about deposit protection and choose a suitable scheme."
"Remember, it's the personal responsibility of the landlord to comply, not the agent's. The court can order a landlord who fails to protect a deposit to pay it into the custodial scheme and to hand over to the tenant three times amount of the deposit. The landlord will also be unable to regain possession of the property using notice-only grounds for possession under Section 21 of the Housing Act 1998 - so the consequences can be very serious."
Tenancy Deposit Solutions will provide an insurance-backed tenancy deposit scheme for landlords and is the only scheme designed primarily for landlords who wish to continue to hold deposits themselves throughout the tenancy. The scheme will be simple to use, 'pay-as-you-go', and will not involve any third party. The fee structure will be announced by the end of February and is likely to be attractive to the average portfolio landlord. Landlord associations are particularly welcome to contact TDSL to discuss terms that may be available to their members.
David Salusbury concludes: "Taking and holding a deposit is one of the few safeguards available to landlords, and 82% of landlords do hold them, worth an estimated £1.2 billion. While a minority of landlords may either be discouraged from taking a deposit, or indeed may be discouraged from letting their property, the majority need to familiarise themselves with the new rules and choose the best scheme for their purposes."
For further information, landlords, tenants and other interested parties should visit: www.mydeposits.co.uk or www.communities.gov.uk.
