New Landlord Deposit Rules

flash_nanny

As a landlady, from April 2007 I will not be allowed to keep the new tenants deposit. Does anyone know what I should be doing with it? In an article I read it says it has to go into a custodial scheme or one of the two insurance based schemes. How do I go about this? I do not want to end up paying an estate agent a huge fee for holding it. Thanks.

randomgal

Try this link:

http://www.communities.gov.uk/index.asp?id=1152035

Government should be providing guidance on this within the next few weeks. Note, the new requirement only applies to tenancies that start from the 6th of April and after.

clutton_2

National Landlords Association is one of the bodies approved by the government to run this scheme. if you join, you get a discount on the cost of joinign the Deposit scheme (the cost to landlords has STILL not clarified) and also cheaper house insurance and a great free legal helpline. Its been rumored that it may not actually come in in April - watch this space.

flash_nanny

Thank you for the info. I will have new tenants moving in the 2nd week of April. So far my Letting Agent has not even mentioned this new rule to me. As it's supposed to come into force soon I would have thought there would be more info around. I only found out from a relation. Thanks.

Bozza

From what I gather, the fees associated with the Insurance backed schemes mean that you'll need to have quite a few properties in order to be able to justify the layout.

The custodial scheme is here: https://www.depositprotection.com

This scheme will pay interest to tenants and landlords on the deposit funds returned. The insurance backed scheme will not do that, I don't believe.

november

The new legislation comes into force as from 7 April 2007 when all cash deposits will need to be paid into a tenancy deposit protection scheme.

The Govnt awarded contracts to 3 companies to run its tenancy deposit scheme:

The Deposit Protection Service (The DPS) which is the only custodial deposit protection scheme free to use and open to all Landlords and Letting Agents. It is funded entirely from the interest earned from the deposits. You can register and make transactions online. Supported by an independent dispute resolution service.
http://www.depositprotection.com/

Tenancy Deposit Solutions Ltd (TDSL). A partnership between the National Landlords Association and Hamilton Fraser Insurance. Insurance-based tenancy deposit protection scheme enables landlords to hold deposits, either directly or through agents.
http://www.mydeposits.co.uk/

The Tenancy Deposit Scheme (TDS). An insurance-backed deposit protection and dispute resolution scheme run by The Dispute Service. Enables landlords and letting agents to hold deposits.
http://www.tds.gb.com/

mystic_trev

The interesting (little known) thing about the new scheme, is that if the Landlord dosen't join one of them the Tenant is automatically entitled to three times their deposit in compensation from the Landlord for non-compliance!

seven-day-weekend

Oh well.... I take the grand sum of £230 from the people who live in my house in the UK.

I guess I won't even be able to take that then.

Always the small people who come off worst to pay the price for a few sharks.

ds1980

mystic_trev wrote: »

The interesting (little known) thing about the new scheme, is that if the Landlord dosen't join one of them the Tenant is automatically entitled to three times their deposit in compensation from the Landlord for non-compliance!

Landlord - "ok thank you for your deposit ill be putting that into a government backed deposit account" (into back pocket)

Tenant - Thats great thanks

6 month later.........

Landlord - "thanks for your tenancy here's your £230 + £1.27 interest"

Tenant - Thank you (none the wiser as to where the money had really been??)

Is this something that works both ways? How do the tenants know you have put ti into an account for them?

I certainly won't be adhereing to the new rules if they want to charge me.

ds1980

apologies didn't read all the info!

Still won't be doing it though there's always ways around it im sure.

If your thinking im a nasty landlord ive never taken any money from any of my tenants and would have to have a bloody good reason to. I have no need for this service why should i bother!

JCR

Unfortunately, I am sure they will find out if you don't comply, especially if the tenant is knowledgeable about the scheme. Presumably you'd have to provide some sort of receipt to the tenant as proof that you were putting their deposit on this pathetic scheme. As has been mentioned the penalty is having to pay 3 x the bond back to the tenant, which is absolutely scandalous.

There is a website called https://www.residentiallandlord.co.uk where one of the posters is desperately trying to think of ways to get around this situation and any new ideas are welcomed. I can't think that many landlords are very happy about this "nanny scheme" and feel that another of our liberties is being snatched away from us by this government.

It is going to throw up all sorts of problems - the bond will be held while any disputes are being resolved, thus holding up the money for tenant to put forward for another rental. This is one problem for the tenant, but the landlord is going to have quite a few more.