Landlord/Tenant Deposit Scheme

stphnstevey

What do you know and what do you think?

TJ27

My understanding is that this has been put on hold until something like the middle of next year (April?) because nobody wants to run the scheme. This surprises me because there's a stack of money involved and there was initially a lot of enthusiasm from banks, insurers and the like.

I think it's desperately needed. We've had a case in my part of the world where an agent simply did a runner with several hundred deposits and I'm sure this wasn't an isolated case.

amboy

I have recently been to a meeting where my LA along with Shelter held a talk about the implementation in April next year, the suprising thing was that she did not have all the details yet !!

Basically 2 schemes -

Custodial - run by govt body, LL pays all deposit to them within 10 days of receiving it, interest earned pays for scheme or may be offered to tenant at the end. At end of tenancy if no dispute then scheme pays accordingly, if there is dispute then there is an ADR alternate dispute resolution who will look at details and then make a decision. They have to pay out within 10 days of end of tenancy !!! (hope they can cope at peak times for student lets etc)

Insurance - Basically the difference is that you pay a premium and keep the deposit and interest, at end of tenancy LL must send the scheme the amount of money that is in dispute and pay tenant the undisputed amount. The ADR will assess the case and make a decision.

My fears, being a LL who has in 15 years only had a couple of times where deposit returning has been a problem is, will the schemes be able to cope with the 10 day turnaround of payouts.

Also what will happen when tenants have done a flit or left a property abandoned?

What I do know is that LL who do not (like myself) take pictures and document the state of properties before tenants move in will HAVE to start doing so as they wont have any proof when it comes to ADR, also I think there will be an element of the tenant disputing all charges as they have nothing to lose and vice versa it will probably encourage rogue LL to start putting in claims for inflated amounts.

Interested to see what others will think.

The lady from Shelter gave a very biased talk on how it would benefit LL and did quote from national research taht 17% of deposits had been held illegaly.

BobProperty

TJ27 wrote:

My understanding is that this has been put on hold until something like the middle of next year (April?) because nobody wants to run the scheme. This surprises me because there's a stack of money involved and there was initially a lot of enthusiasm from banks, insurers and the like......

I'm not surprised that no-one wants to run this scheme. For a start when do the phrases "government run" and "within 10 days" ever appear together when related to housing. Banks and insurers won't want to run it either, they can make the same money by taking deposits off people and not having to arbitrate on disputes over a few hundred quid within a few weeks. Also the whole system will be open to abuse by both sides and attempts at "work-arounds" by landlords (like not taking a deposit but wanting a credit card for any payment due later).

clutton_2

how many tenants will know about this scheme ?

if the advertising for it is as good as that for the new HMO regs - i personally did not see or hear ONE advert for this - then hardly anyone will know about it !!

clutton_2

it has been announced today that the winner of the contract to run this scheme will be announced on 22nd November !!!

a full detailed list of how it will work is here

http://www.singingpig.co.uk/forums/161810/ShowThread.aspx#161810

stphnstevey

I'm concerned about the penalties for NOT using a deposit scheme as the goverment are making it compulsory. Apparently you can have problems gaining possession back of your house if you haven't used a scheme and also pay a fine upto three times the deposit directly to the tenant.

I can see unscruopulous tenants finding out about this, not paying rent to those landlords that don't use a scheme, not being evicted in the normal three months or so AND getting a payment of upto three times their deposit in compensation.

What t**ser thought of this?

sooz

clutton wrote:

it has been announced today that the winner of the contract to run this scheme will be announced on 22nd November !!!

a full detailed list of how it will work is here

http://www.singingpig.co.uk/forums/161810/ShowThread.aspx#161810

ooh, who wants to bet on the outcome.....

i think, like every othe carefully considered, properly tendered, govt scheme the winner will be.............crapita..

any other guesses?

sooz

amboy wrote:

I have recently been to a meeting where my LA along with Shelter held a talk about the implementation in April next year, the suprising thing was that she did not have all the details yet !!

.

that's normal. i went to a LA meeting after the new HMO regs came into force, and they still could not answer peoples' questions as they did not have all the facts - not that that stopped them threatening the audience who'd come willingly to learn with the £20,000 fines for non-compliance.

BobProperty

stphnstevey wrote:

.....I can see unscruopulous tenants finding out about this, not paying rent to those landlords that don't use a scheme, not being evicted in the normal three months or so AND getting a payment of upto three times their deposit in compensation.....

I seem to remember reading a proposal or draft version about this, I will go and read the singing pig link. What stood out in my mind was the use of non-monetry deposits, which seemed open to abuse by unscroupulous tenants. Back after a read.

BobProperty

Found the bit I wanted:

"A landlord is similarly prohibited from serving such a notice where he has taken a deposit in form not permitted under s213(7) (e.g. where he has accepted an article of value belonging to the tenant, instead of a money deposit) until after he has returned that deposit to the person who gave it to him."

Watch out my next landlord