Landlords not following the rules of the scheme are at risk of the tenant being able to claim a penalty of three times the amount of the deposit taken.
Many landlords are advised by letting agents to ensure the rules are followed. Other landlords may not be aware of the rules of the deposit scheme and could fall foul of the regulations.
The scheme requires that the tenant's deposit is held by an authorised deposit scheme. The landlord has fourteen days to comply with the initial requirements of the scheme and provide information to the tenant. If the fourteen day deadline is not complied with, the triple penalty may be applied against the landlord. The information required includes the identity and address of the scheme administrator, other guidance and information explaining the scheme and procedures for repaying the deposit at the end of the tenancy. It also includes details such as dispute resolution.The county court will usually award the triple penalty against the landlord unless there is good reason for the penalty not to apply. In one recent case, involving a breach of the rules, the court did not award the triple penalty as the landlord had already repaid the deposit to the tenant.
Landlords should make sure they are aware of the deposit scheme rules and if there is any doubt take proper advice from their lawyer. Where a claim is already being made by the tenant a quick refunding of the deposit may be a way of avoiding the triple penalty.
If you need advice in this area why not get in touch with us using the contact area on our website.
1 comment:
It appears to be a long-standing problem. Landlords want a tenant to pay (usually) a month's rent in advance and they also want a deposit, again usually equal to a month's rent.
This is ostensibly to cover for any damages that may occur during your tenancy and if, at the end of your stay in the property, there is a need for repairs to be carried out, then this deposit would theoretically be enough to cover the costs. In the real world, many landlords simply take the deposit from a tenant with no intention of ever handing it back, treating it as some sort of holiday fund or the like.
The UK Government took the view that it was unfair and introduced legislation that began in early 1997, stating that Landlords should place tenant deposits in an official scheme. The tenant is then given a reference code for their own deposit so that they can confirm its placement. The theory being that at the end of the tenancy, the scheme helps to make sure that the deposit gets returned to the tenant.
In practice, it isn't happening in a majority of cases. Many landlords are not paying attention to the laws and continue to pocket the tenant deposits as before. The British Landlord Association estimates that in the reagion of 80% of landlords don't adhere to the laws requiring deposits to be placed into one of the three authorised schemes.
Tenants are advised to take proper legal advice and to ensure that they are protected, to avoid hassles later on. It can save a lot of time, heartache and money.
www.ReturnMyDeposit.co.uk offers FREE and professional legal advice to tenants in that situation. Acting for tenants, not landlords.
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