2^nd Sep 2018

Private Rented Sector landlords are unanimously defending the current deposit protection schemes that have been decried by the consumer group Which?

In the group's recent survey it stated that 43% of tenants are either paying for their deposit by credit card or borrowing to do so.

Those tenants that took part in the survey and had moved out of a property in the last two years, a sixth of them did not receive their tenancy deposit back for at least four weeks after vacating the property, and a third had to fund a deposit on their new residence without being reimbursed in time from their previous accommodation's deposit.

The survey also reported that both landlords and tenants were under misapprehensions concerning deposit reductions.

62% of landlords when asked in the survey about deductions believed that tenant's unpaid bills could be taken from the deposit, 18% for wear and tear and in 9% of cases, tenants did not receive any explanation on why money was taken from their deposit by the landlord.

However a policy director for a landlord group does agree with Which? that it is a major problem for tenants having to pay for a new deposit, before they had received the money back from their previous residence.

He made a positive suggestion that deposit schemes could let the landlord of the new property know that their prospective tenant is in fact waiting for their previous deposit to be paid back to them, which can be transferred direct to the landlord for the new tenancy agreement. He also suggested that perhaps a stop gap insurance policy could be taken out as a protection for the time it takes for the deposit to be transferred,

But the spokesperson criticised the survey when he said: “I think the report was somewhat unfair as a piece of research.

“Clearly there are some tenants who are going to be disappointed in deposit disputes, but there is no evidence that they are not being dealt with fairly by the schemes.

“Any tenant who loses money isn’t going to be satisfied with the process, but that doesn’t mean it is wrong.”

He also argued that some landlords may not be fully conversant with the legalities of taking deductions from deposits, there are rules that the schemes operate under so that tenants are not subject to illegal deductions because of the adjudication processes in place.

Another industry body also defended the present deposit protection schemes' operations, when it pointed out that there are few cases that have to undergo the adjudication process because of disagreements between tenants and landlords.

A spokesperson for the group, said: “There’s a striking contrast between the picture this survey paints of consumer perception of tenancy deposits, and the more objective data from the deposit protections schemes themselves.

“Currently approximately 4 million deposits are protected within a deposit scheme, around half of which are returned to the tenant without a deduction at the end of the tenancy.

“Even where there are deductions, these are usually agreed between the tenant and the landlord.

“Fewer than 2 per cent of deposits end up going through the adjudication process.”

The spokesperson added: “The Government has been looking into affordability within the sector for some time now.

“More and more people are turning to the private rented sector for a home because we have a housing shortage and a social sector that is in long-term decline.

“Deposits remain an important part of a landlord’s business and are just one part of a wider affordability issue; the only solution to which is to build more homes, particularly in the social sector.”


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