The comments come in light of the introduction of the Government of mandatory tenant deposit schemes. Managing Director of Paragon Advance Bryn Cole has accused the bodies running the government backed schemes at failing to promote alternatives at the expense of landlords.
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" The National Landlords Association, apparently the largest in the UK, has come up with some interesting information on their website as to what landlords could do with regard to deposits. Unsurprisingly it highlights My Deposits (Tenancy Deposit Solutions Ltd). There is a cost to this service to the landlord. This scheme is jointly owned by themselves and their insurance provider Hamilton Fraser Insurance. Until the end of March 2008 Tenancy Deposit Solutions Ltd recorded total assets of nearly £1.6 million and balance sheet movements indicated an annual profit in the region of £275,000. The National Landlords Association Ltd records total assets of over £2 million, of which nearly £1.9 million is in cash. There is no mention of director or shareholder payments as these have not been made available to Companies House.
Other information on their website relates to the above schemes mentioned. It also comments that an alternative is for landlords not to take a deposit. Indeed it is, however I’m not sure many landlords would see this as an acceptable alternative. Losers: not the NLA or Tenant Deposit Solutions Ltd.
Should the landlord not comply with the terms of these complicated schemes, they are potentially liable for three times the deposit amount. According to Mydeposits press release, during April 2009 less than 1 in 10 disputes were found in favour of the Landlord which is scary stuff."
Alternatives failed to be mentioned
" There is a simple alternative which the NLA have conveniently failed to mention. A simple insurance policy underwritten by one of the largest legal expenses companies in Europe, that will pay the Landlord his dilapidations costs up to the value of one month’s rent. No registration fee. No complicated processes. Just a very simple form for the tenant to complete. The landlord will be paid his dilapidations within 14 days of the claim being accepted subject to the terms and conditions being fulfilled, such as regular inspections and inventory checks and prompt claim notification. This is obviously of great benefit to the tenant as he can keep his deposit. It’s a relatively low, one off premium payment which of course can be funded by the tenant, who now hasn’t got to pay a deposit, via the tenancy agreement. Losers: No one.
Of course, it’s of great importance to ensure deposits are properly managed to the benefit of both tenant and landlord but surely bodies such as the NLA should be making their members aware of such alternative schemes. These alternatives won’t suit everybody but, whilst they are being excluded, it appears that there are vested interests behind the exclusion. I will let the reader decide.” Adds Bryn
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