Thousands of landlords “unaware of tenancy deposit scheme”

It’s likely that thousands of landlords are not complying with the tenancy deposit scheme, according to the Association of Residential Letting Agents.

The scheme has been in force since April 6th and is designed to protect a tenant’s deposit in the event of a dispute. Landlords who don’t register with one of the three government-approved operators face substantial fines.

In spite of this, a spokesman for ARLA said they suspected that thousands of landlords weren’t aware of the changes or hadn’t realised their importance.

“One of the problems is that the three schemes were finalised quite late and many people just aren’t aware of them. It’s likely that thousands of landlords just haven’t cottoned on yet.”
When a tenant pays a deposit, the landlord has 14 days to hand it over to a government approved private company.

Alternatively, he could keep the money but would then have to register with an insurance scheme administrator who could reimburse the tenant in the event of a dispute. If a landlord fails to enter into one of these arrangements then the tenant can apply for a county court order forcing him to do so. In these circumstances, the landlord may find himself being forced to pay the tenant an amount equal to three times the deposit.

Landlords who haven’t already done so should select a suitable scheme as soon as possible. If they keep a tenant’s deposit without registering with an approved scheme they could lose thousands of pounds.

Please contact Emma Dancer if you would like more information about tenancy deposit schemes or any aspect of commercial property law.

The value of making notes when hit by breach of contract

The importance of making contemporaneous notes when affected by a breach of contract has been highlighted by a recent High Court ruling which reduced a company’s compensation because it had failed to keep written records.

The case involved a commercial printing firm called Bridge UK which wanted to install a new printing press. It contracted Abbey Pynford to prepare the necessary foundation. Later, when the company installing the printing press examined the foundation, it decided that it wasn’t satisfactory and remedial work had to be carried out.

Abbey did this successfully but it meant the press was not ready to be used until nine days after the agreed completion date. This affected Bridge’s business so it took legal action to recover its losses and to cover the cost of management time in dealing with the problems caused by the breach of contract.

Bridge hadn’t made contemporaneous notes about the time its managers devoted to the printing press and so an estimate had to be made retrospectively.

The court accepted the retrospective record but Mr Justice Ramsey said: “It must be borne in mind that such an assessment is an approximation of the hours spent and may over-estimate or under-estimate the actual time which would have been recorded at the time.”

He therefore reduced the damages that would have been paid had a contemporaneous record been kept by 20%.
If your business finds itself in this situation and needs to recover costs for lost business/management hours please contact Faizal Essat.