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.