ATTN Landlords: Failure to comply with Deposit Protection Scheme Laws will result in fines up to 3x the deposit
We all know how it is with new tenancies; they are a stressful time where landlords are often managing several things at once. Everything from making the property liveable, to the checking of references, managing the transactions of fees and to top it all off, the government has enforced the Right To Rent checks. So there’s no doubt, things get missed or there are just some processes that get left behind, and the registering of the deposit is often one of them.
Many of you will be fortunate enough to have an agent who manages the move in of your tenants. However, whether you do or don’t the process of registering a deposit is a task often left in your hands.
Since the 6th April 2007, the Government's new Tenancy Deposit Scheme has been in full force. This means that it’s a landlord’s statutory obligation to register the deposit with one of three government-backed tenancy deposit schemes:
The choice of which scheme to use is completely up to you. For more information on each scheme click the name above to see further information provided on each scheme’s website. However, please feel free to speak with a member of staff here at PropertyTime to further discuss your options.
Also know, that whilst you may legally have 30 days to register the deposit, we recommend knowing your scheme prior to a tenancy, so that your agent may provide the tenants with any necessary paperwork to fill out.
Why are we telling you all of this?
The issue of deposits is something you will never here the end of because at the end of the day, the registering of the deposit is in your best interest.
Once a tenancy has ended and if your property has been left in an unacceptable condition you may be able to withhold part of or all of the funds to aide in fixing the damage caused. Know that this can only be done when backed with sufficient evidence, such as a check in and check out report. However, if the deposit has not been registered and you have not completed either report then you will not be able to do so. Notably, if you have not registered the deposit you are at risk of facing legal action as well as fines that can equate to three times the amount of the deposit initially paid. This warning comes after property lawyers, Goldsmith Williams reported on a case where ‘a Landlord did not comply with the current strict legal obligations and ended up being ordered to repay the deposit, plus an additional sum equivalent to 2.5 times the deposit in compensation.’
So what can you do to avoid the hassle and fines, and to ensure you have followed the deposit scheme guidelines:
First things first…
Choose a scheme and register the deposit paid by the tenants. You have 30 days to do so, but the sooner the better.
Provide your tenants with the following information:
As stated on the governments website, upon receiving the deposit, you have 30 days to advise the tenants of the following:
1) Address of the rented property
2) How much deposit you’ve paid
3) How the deposit is protected
4) The name and contact details of the tenancy deposit protection (TDP) scheme and its dispute resolution service
5) Their (or the letting agency’s) name and contact details
6) The name and contact details of any third party that’s paid the deposit
7) Why they would keep some or all of the deposit
8) How to apply to get the deposit back
9) What to do if you can’t get hold of the landlord at the end of the tenancy
10) What to do if there’s a dispute over the deposit
Then at the end of the tenancy:
Ensure a check out report is conducted immediately after the tenants move out and before the new tenants move in. You have 10 days to return the initial funds back, unless agreed otherwise. If there is a dispute over the funds, the deposit will be protected with TDP until it is sorted.
If you have any questions regarding the deposit schemes, require advice about a current tenancy or would like to know more about third party check-in/check-out reports, please don’t hesitate to contact our office on 020 7794 2008 or via email@example.com where we will be able to best assist you.