DCLG to end Superstrike anomolies

Plans are a foot by the Coalition in their new Deregulation Bill to strike out the Superstrike anomaly resulting from the Superstrike vs Marino Rodrigues court case.

The anomaly in the legislation arose from the case where a landlord took a tenants deposit before the TDS came into force in April 2007 but where the fixed term ended after this date.

In this case the Court of Appeal ruled that the landlord acted wrongly and consequently was contravening the TDS legislation.  The DCLG are planning amendments which are before Parliament and will in this situation deem the landlord to having complied with the legislation.  Those landlords where the tenancy became periodic and a deposit is still held - will have  90 days after the legislation to potent the deposit.  Most importantly in terms of numbers of landlords,  a deposit where a landlord no longer holds a deposit, the landlord will have deemed to have complied with the TDS legislation.

Some long-term landlords will breath a sigh of life.  For most of us it's an academic exercise.

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TDP axed

I've been a regular user of the Deposit Protection Service (DPS) since it's launch and the fact that landlords are now required to hold their tenants deposit in one of the approved landlord deposit scheme providers.  Initially there were two insurance backed schemes.  Most small landlords have found like me that the free Custodial Scheme offered by the DPS with no set up cost and fees does everything that is required even if they have to hand over their tenants deposits to somebody else.

It appears that the government has concluded that there is no longer room in the market for two insurance backed schemes.  The tenancy deposit scheme which was originally known as the Dispute Service and more latterly the TDP is run by Capita Plc but is now being transferred to Mydeposits the other insurance backed scheme.  TDP has not been accepting deposits from September the 14th as confirmed on their website. 

Competition remains the same
The DPS has now been granted permission to offer an insurance backed policy for landlords and agents wishing to continue to hold their tenants deposit.  This means that there are still 2 insurance backed providers in the market.

One good thing is that with less TDS providers we have less confusing acronyms to deal with: DPS, TDS, TDP to name just a few!

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Northern Ireland launches TDS

New legislation to protect tenants in Northern Ireland comes into effect on April 1^st, with government-licensed Tenancy Deposit Schemes (TDS) launched to bring Northern Ireland into line with England, Wales and Scotland.

All landlords and letting agents in Northern Ireland who take a deposit from their tenant must submit it to the scheme within 14 working days from the receipt of money. The law applies to only new deposits.

They must also provide the tenant with important information about where their deposit has been protected (The Regulation 12 prescribed information) within 28 days.

Landlords and agents will have to protect their tenant’s deposits using either a custodial or insurance-based option. In other words, they must decide whether they wish to hold onto their tenant’s deposit money themselves (by using an insurance-based scheme), or hand it over to the scheme to retain for the duration of the tenancy (by using a custodial scheme).

Tenancy deposit protection was introduced in England and Wales in 2006 and in Scotland last year to raise standards in the private-rented sector and it’s hoped its introduction here will do the same for Northern Ireland tenants who until now have had no protection or guarantee over their deposit.

my|deposits Northern Ireland has been formally approved by the Government to operate a scheme in Northern Ireland having run a similar scheme in England and Wales over the past six years and Scotland since last year.

The scheme has protected £1.6billion worth of deposits on behalf of nearly 100 thousand members along the way and has consistently met all targets set by the Government.

There are strict penalties for of up to three times the deposit amount for those who do not protect a tenant’s deposit under the new law or provide the necessary information about how the deposit will be protected to the tenant, meaning it’s important all involved are informed about how the scheme will affect them.

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TDS changes on FRIDAY!

As changes to tenancy deposit protection laws come into force this week, Shelter is calling on landlords to ensure they are protecting their tenants’ deposits, and protecting themselves from penalties.

The housing charity campaigned for the changes to the tenancy deposit protection law, which tighten up loopholes making the law more effective for both tenants and landlords.

From 6 April landlords will have up to 30 days from the start of a tenancy to place their tenant’s deposit in one of the three official protection schemes, up from the previous 14 days. The penalty for failing to do so will now be up to a judge to decide, rather than a fixed penalty and will range from one to three times the value of the deposit, which will be awarded to the tenant.

Recent figures from the Association of Residential Letting Agents (ARLA) show that 47% of their members reported a rise in unplanned lettings¹, where homeowners are becoming landlords out of necessity rather than choice as they need to move but are unable to sell.

With the increase in homeowners becoming landlords, many perhaps for the first time it is important that they are aware of their responsibilities towards their tenants to avoid unwittingly breaking the law, particularly with regards to tenant deposits.

With thousands of people every year coming to Shelter for help with deposit disputes, the housing charity wants to ensure that all landlords, whether professional or homeowners letting their property, are abiding by the law and avoiding unnecessary disputes and potential financial penalties.

Campbell Robb, Shelter’s Chief Executive, said: “This legislation is enormously important for the three million households privately renting and for their landlords.

“With these vital improvements the legislation can achieve what it was created for – setting out clear responsibilities and timescales for landlords to protect tenants’ deposits and providing a quick and efficient way of resolving any disputes.

“We know that the majority of landlords want to do the right thing, the challenge is to ensure that they are not caught out by these changes and that they fully understand their legal responsibilities. We want landlords to know that this legislation benefits them as well as providing private renters with the reassurance that their hard-earned deposits are protected.”

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DPS dispute resolution

Landlords are familiar with the Tenancy Deposit Scheme (TDS).

Any body who has worried about a dispute with their tenant over their tenancy deposit should have a look at Tom Derretts' excellent series of posts and advice on disputes over the tenancy deposit.

For information about repaying the tenant's deposit have a look at this recent magazine article.

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Tenancy deposit protection news

Shelter's advice line saw a 40 per cent rise in calls about rent deposit issues last year .

It hopes that new laws on tenancy deposit schemes, will help when they are introduced later this year.

The new changes will mean that tenants will still be able to make a claim against their landlord after their tenancy ends, it will also block the loop hole that allowed landlords who were prosecuted for not placing a deposit in any of the registered schemes to sign up posthumously before the case comes to court, which did seem rather ridiculous.

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My tenants are hassling me!

Generally, I'm one of the lucky landlords. Reasonable tenants. No major tenant arrears (so far...I am keeping everything crossed as I write this!)

However, despite this apparent trouble and care free relationship with my tenants and the buy-to-let portfolio I have notice recently I'm getting a steady stream of small niggling issues.

The result.....my tenants are hassling me!

Could it be my middle aged disposition or are tenants getting more demanding?

On the 'TO DO" LIST this week.

1. A tenant who is still insisting she needs her full quota of 4 thousand channels available on Freeview ( a new digital aerial!)
2. Another tenant who keeps having blockage issues with his upstairs sink (a single man living on his own - best not think too much about this!)
3. A new tenant couple who have sent me an essay of an email pointing out things that need doing (in a very nice way).

I did finally get one of my tenants deposits returned from the Deposit Protection Service. RESULT and despite my earlier frustrations.

There is only one thing for it. Practice my yoga breathing. Rise above it and work my way the through the list and hope next week it will be shorter!

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TDS under review

Housing Minister keeps the Tenancy Deposit Scheme providers under review.

According to the latest answer to a Parliamentary Question in the House of Commons Grant Shapps is keeping a close eye on the performance of the Tenancy Deposit Scheme providers against key performance indicators.

It would be interested in seeing what landlords think about the performance of the selected Tenancy Deposit Schemes.  I have only used the custodial scheme provided by the Deposit Protection Service which generally I have found pretty easy to use.

What are you thoughts on this and the alternative schemes?  One of my questions would be couldn't we have more providers.  Surely this would help to drive down costs?


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TDS High Court ruling

The message from the latest High Court ruling last week on the need for landlords to protect their tenants deposit is a case that landlords don't need to panic if they forget to protect it within the 14 days.  The 14 day requirement was that set out by regulations in the 2004 Housing Act and which came into force in April 6 2007.

The outcome of the High Court decision was that a landlord is not subject to any of the penal measures providing they protect the deposit before the court ruling.

The sanctions against a landlord for not protecting the deposit in the prescribed time period was that the landlord could not use a section 21 notice to gain possession and that they would have to pay the tenant 3 times the amount of the deposit.

It appears that the failure of the legislation to stand up to court scrutiny was down to the fact that it was poorly drafted.  It is not clear at this stage whether the government will take steps to amend the Housing Act to plug this perceived 'loop hole'.

In the meantime we would still advise landlords to continue to protect deposits in accordance with the legislation.  However, should landlords forget, or miss the deadline.  The message is don't panic Captain Mainwaring....

For more details on the court case Universal Estates v Tiensia and Honeysuckle Properties v Fletcher.


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Tips on Tenancy Deposit Disputes 2: Verbal Agreements

Tip 2: Don’t make verbal agreements.

Verbal agreements are notoriously difficult to prove, and reliance on them is asking for trouble. You may have a touching sob story about why you trusted the tenant, but how nice they seemed or how well you knew their aunt is unlikely to influence the outcome of your dispute. Renting out a property is a business transaction and should be treated with the appropriate formality regardless of who the tenant is.

If you have made a verbal agreement with your tenant and you find it is the subject of a deposit dispute, all is not lost. A compelling argument can be pieced together from emails, phone bills and other fragments of evidence, which can be used to show that a particular agreement was reached. Adjudicators employ the civil standard of proof and determine cases in the balance of probabilities. They are looking for evidence to show which version of events is the more likely. It doesn’t necessarily take a great deal of properly presented circumstantial evidence to outweigh a bare denial on the part of the tenant.

The same is also true if the tenant claims you made a verbal agreement which you deny. With the truth on your side, a bit of detective work can usually create a solid case. If you are the type of landlord who never makes verbal agreements, then a little evidence of your usual business practices may also be persuasive.

Tom Derrett is the Principal of Deposit Claim and an expert on the Tenancy Deposit Scheme.

Letting agent leaves TDS

Another large letting agency firm hasstopped using the Tenancy Deposit Scheme and switched to Mydeposits.

LSL, parent company of Your Move and Reeds Rains, has 584 lettings branches. The move to Mydeposits follows that of Countrywide Residential Lettings. Both firms made the decision to quit following large price hikes by the Tenancy Deposit Scheme.

Read more in Estate Agent Today

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NEW carpet - YOU decide

I've got a new tenant moving in Wednesday.

Nice guy. I'll call him Craig for sake of anonymity. I guess he's probably about 19, 20 tops.

I suspect he may be gay, but whatever..

He's certainly very keen to turn my flat into a nest which is always good news. He's already pushing me to allow him to decorate. I'm wary that I don't end up with a kaleidoscope of colour. I've explained if the colours are neutral I'm cool providing they are agreed in advance.

Carpet dilemmas!!!!

Now one issue that has arisen is the state of the carpet. It's in a pretty shabby condition - not through age (it's only 3 -4 years old). It's because of the previous tenant has giving it a bit of a hammering! Now I could have tried to claim the costs of replacement back from the deposit held by DPS.

However, the inventory prepared by the letting agent wouldn't have given me a hope against the onslaught of a Tenancy Deposit Scheme (TDS) adjudicator and they might give me £40 towards cleaning which wouldn't bring the lustre back to my neutral carpet.

So.........my dilemma! Do I grant Craig his wish of a lovely new covering for his bachelor pad?

The other alternative is I make him wait.....the proverbial tenant carrot.

I'm meeting Craig on Wednesday to go through the 'check in' so your views are needed ASAP! In the words of Big Brother - YOU decide!

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Tenancy Deposit Scheme Update

An interesting post here from Tessa at Landlord Law outlining the current Tenancy Deposit Schemes, their charges and their differences.

Read blog post here

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Communities and Local Government assess the Tenancy Deposit Scheme

Communities and Local Government is reported to be satisfied with the “consistently high” performance of all three of the approved tenancy deposit schemes.

CLG has also confirmed that it is happy with the way the tenancy deposit legislation is working, saying it has had a positive impact.

Read all their comments on TDS in this Estate Agency Today article

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The NLA believe the Tenancy Deposit Protection is working

Tenancy deposit protection legislation is working according to the National Landlords Association (NLA),Chairman, David Salisbury:

“The NLA believes we need to be careful not to let the current discussions about TDS price increases detract from the principle purpose of tenancy deposit protection: offering legal protection for tenants where, in the small number of cases, landlords wrongly withhold all or part of their deposit."

See full comments here

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ARLA join in the TDS feud

More on the dispute over the price hike from the Tenancy Deposit Scheme.

ARLA are now launching a working group to review the Tenancy Deposit Scheme in a bid to resolve the dispute surrounding its new fee structure.

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More pressure on The Tenancy Deposit Scheme

The Negotiator continues to pile pressure on the Tenancy Deposit Scheme after it announced a change in pricing structure for letting agents.

The Negotiator does a Questions and Answers session on how letting agents can change from the Tenancy Deposit Scheme to one of the alternatives 'My Deposits'.

Take that TDS!

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TDS price war!

Any landlord taking a tenancy deposit will know that they have to protect the tenants deposit with one of the governments approved tenancy deposit schemes.

Two of the schemes involve a landlord or their letting agent having to pay a fee to the provider who then insure the deposit against potential loss and which allows the landlord or letting agent to retain the tenancy deposit.

It appears that because of the high number of cases going to arbitration. That is where the lanldord fail to agree on the return of the rental deposit one of the Tenancy Deposit Scheme providers The Dispute Service has had to increase their charges by 23%.

The other paid for provider of tenancy deposit services My Deposits has responded by stating that it is not going to raise it's charges! It's all getting very catty...

We say sod the lot of them. Why pay to hold on to your tenants deposit when the other custodial scheme the deposit protection scheme allows you to deposit it for free...zilch.

The other alternative for landlords is not to take a deposit at all and just ensure that you have a guarantor and charge an administration fee.

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Northern Ireland could have their own TDS

Northern Ireland could have its' own tenancy deposit scheme (TDS) according to the latest reports by the BBC.

Other proposals from the Department of Social Development for the private rental sector in Northern Ireland are:


• A central scheme for tenants' deposits so that landlords cannot simply refuse to pay back deposits for "flimsy reasons"

• Government deposit guarantee for vulnerable people who cannot afford them

• An independent body to manage disputes between landlords and tenants and encourage compliance with their tenancy agreement

• New fitness standards implemented by 2015. Landlords penalised if they do not meet these standards

• Much greater awareness of the rights of tenants and the responsibilities of landlords

• Longer periods of notice to quit for long term tenants.

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