Council Deposit Bond Scheme

Takmon

A couple i know have recently moved out of a rented house after living there for just over 5 years. They never paid a deposit to the landlord but instead the council offered a Deposit Bond to the landlord. This meant the landlord never received a deposit but instead the landlord is guaranteed a certain amount (£500) and they had to then pay this amount to the council over a period of time which they did.

Now they have moved out the landlord is claiming the entire deposit bond from the council for damage to the property. They want to dispute this and this has involved emailing a person at the council who considers if the claims are valid.

This also means the deposit was never registered with a Tenancy Deposit Scheme because the landlord never received the money.

I can't find much information about this kind of deposit scheme so if anyone has any tips or advice i can pass on it would very helpful to them.

[Deleted User]

This link from Citizens Advice public site:
https://www.citizensadvice.org.uk/housing/renting-privately/ending-your-tenancy/getting-your-tenancy-deposit-back/

says this:

If your local council paid your deposit
You probably won't get any money back from your deposit if your local council paid it for you or guaranteed it in a bond scheme.
If your landlord takes money from your deposit for any damages or rent that's owed, your local council will have to pay it. You'll probably have to pay them back.

Takmon

AngelicKaty wrote: »

This link from Citizens Advice public site:
https://www.citizensadvice.org.uk/housing/renting-privately/ending-your-tenancy/getting-your-tenancy-deposit-back/

says this:

If your local council paid your deposit
You probably won't get any money back from your deposit if your local council paid it for you or guaranteed it in a bond scheme.
If your landlord takes money from your deposit for any damages or rent that's owed, your local council will have to pay it. You'll probably have to pay them back.

It's seems like this could be a loophole for landlords to avoiding putting the money in a deposit protection scheme.

A third party (in this case the council) guarantees a certain amount in the event of damage to the landlord, the tenants then pay this amount to the third party. At the end of the tenancy the third party decide to give all the money to the landlord. The tenant has no protection from the deposit protection scheme and has to use the courts to argue their case and get any money back they believe the landlord shouldn't have gotten.

[Deleted User]

Actually, to be fair, I don't think this is driven by landlords. I think the Deposit Bond facility from a local authority is to make a property available to tenants who couldn't otherwise afford the initial deposit - the upside for the council is prevention of homelessness. Again, to be fair, I don't think the council automatically sides with the landlord's view of the situation. Hopefully your friends have been able to supply enough evidence for the council's decision maker to make a fair and impartial assessment. Fingers crossed they get some, if not all, of their deposit back!

diggingdude

Councils pushed for this as many people could not afford a deposit. The council is not likely to hand over money to the landlord without reason as if they have to pursue the tenant for the money it likely to be difficult to get from those who can't even save for a deposit.
I wouldn't think this is a way of getting round the DPS scheme. When I was doing a placement with housing it was hard enough to get them to accept the bond as many tenants using the scheme were not seen as desirable to the landlord