New Deposit Service launched

New Deposit Service launched

10:36 AM, 9th September 2014, About 10 years ago 48

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As many as 38% of landlords calling the Landlord Action legal helpline for advice on evicting a tenant have failed to place their tenants’ deposits in a government recognised scheme within the prescribed 30 days of receiving it, or have not even heard of the scheme which came into force back in 2007.

Landlord Action has now launched a deposit service to deal with these cases. Paul Shamplina Landlord Action

Reviewing enquiries from the start of this year, there is still a major problem with amateur landlords (and some agents) having very little knowledge of this important piece of legislation, which is seeing an increasing number of landlords facing penalties of up to three times the value of the deposit, which is then awarded to the tenant. The landlords also face penalties if their agent failed to comply with the legislation, which adds tension to the relationship between landlords and their agents.

There are too many landlords that still do not know enough about being a landlord and their responsibilities. Many are failing to comply with deposit protection rules and this is having a knock-on effect when landlords wish to evict through Section 21. The simple fact is, ignorance will not solve the problem.

The only way a landlord can legally evict a tenant who will not move out voluntarily (and who is not in arrears or in breach of their tenancy agreement) is via a court order for possession, but in order to obtain this, a landlord must first return the deposit. Furthermore, we are receiving more and more phone calls from desperate landlords who are being sued by their tenants for compensation for not protecting the deposit.

It seems to me, that tenants are becoming savvier than landlords when it comes to buy to let legislation. Landlords, this is your business, you must be fully versed in your responsibilities.

Solicitors are reluctant to take on these cases as there is no defence against it and it is purely down to the judge’s discretion. In response to the rising number of enquiries with deposit issues, Landlord Action has launched a fixed fee deposit claims mitigation service for landlords, to act on the landlord’s behalf in dealing with the court paperwork and also attempting to reduce the level of penalty the landlord faces.

Eddie Hooker, CEO of MyDeposits, said “the findings of Landlord Action are somewhat worrying, especially as all three schemes have seen a healthy year on year increase in the number of deposits being protected. Having said that, we should not become complacent and there is clearly more work to be done in ensuring that deposit protection is embraced by the entire private rented sector. Landlords and agents should be aware that protecting the deposit with an authorised scheme is only one part of their legal responsibility. The other requirement is to correctly serve the Prescribed Information to the tenant and this is definitely an area where better understanding of the legislation is needed. The majority of legal cases we see surround the incorrect issuing of the Prescribed Information, or failing to issue it all. All schemes have extensive information on how to comply with the legislation, including timescales on their websites and we urge letting operators to ensure they understand their obligations”.

Please CLICK HERE if you wish to see the new Deposit Service

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


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Comments

Mark Alexander - Founder of Property118

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16:04 PM, 12th September 2014, About 10 years ago

How many bad tenants leave having caused exactly the amount of damage or rent arrears as the deposit? I suggest none! Tenants are generally very good or very bad, there's rarely a middle ground in my 25 years of experience.

So - just a quick point to support what Alan has been saying but which nobody, including Alan has yet said. Confused? LOL - read on .....

If you hold let's say a £700 deposit and a tenant causes let's say £2,000 worth of damage or rent arrears do you just write off the rest? No of course not, you would sue for it if there was any realistic chance of recovery wouldn't you?

On that basis, why wouldn't you just sue for the full amount?

I am seriously considering Alan's modus operandi, it makes so much sense!

The "fees" would more than compensate for unrecoverable losses in my experience. I would also save on fees to My Deposits, a lot of hassle, risk of messing up and the potential hassle of dealing with a dispute. Having said all of that I've never had to deal with a deposit protection dispute but I've heard enough stories to know I don't want to either!
.

Alan Loughlin

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20:03 PM, 12th September 2014, About 10 years ago

for a relatively small amount a rent guarantee insurance that lasts a year can be bought, this includes insurance for damage so this can be mitigated.

Mark Alexander - Founder of Property118

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20:16 PM, 12th September 2014, About 10 years ago

Reply to the comment left by "Alan Loughlin" at "12/09/2014 - 20:03":

I've not come across RGI which also covers damage, which insurers offer that Alan?
.

Alan Loughlin

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20:20 PM, 12th September 2014, About 10 years ago

landlord referencing has one, will get details

Mark Alexander - Founder of Property118

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20:23 PM, 12th September 2014, About 10 years ago

Reply to the comment left by "Alan Loughlin" at "12/09/2014 - 20:20":

Interesting!

One of there guys called me a while ago to say they had launched a new RGI scheme and I promised to look into it. Thanks for reminding me, it had slipped my mind.
.

Yvette Newbury

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0:06 AM, 13th September 2014, About 10 years ago

Mark - but that only works if the tenant is worth suing! How often do we hear on these forums that a tenant owes rent money as well as possibly damage to a property and they have no car, no assets of any description and how often do we hear solicitors say there is no point in chasing someone if they have no money. At least if you hold a deposit you have the 1 months rent plus something towards cleaning/repairs etc which amounts to more than a few pounds My deposits now are over two thousand pounds. There is no way I could ask for that amount as a fee (non-refundable) up front. As always, I guess it depends on your level of rent and the market you are in with regards to type of tenants. What works for one doesn't always work for another.

Fred Bloggs

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4:18 AM, 13th September 2014, About 10 years ago

Reply to the comment left by "Yvette Newbury " at "10/09/2014 - 23:51":

See my post "A recent tenant of mine has put it in writing to me" like I said before, it would be interesting to hear what a judge has to say if the Tenant took me to court when I was only acting on her instruction !

Fred Bloggs

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5:23 AM, 13th September 2014, About 10 years ago

Reply to the comment left by "Julie Ford" at "11/09/2014 - 13:23":

Not exactly a good example, for a start you have 3 parties involved when there is in fact only 2 ! now if you'd said " the police had given me a note that saying that they didn't want me to wear a seatbelt" then I think that would have been more appropriate !

Mark Alexander - Founder of Property118

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10:05 AM, 13th September 2014, About 10 years ago

Reply to the comment left by "Alan Loughlin" at "11/09/2014 - 15:18":

Hi Alan

True to my word I'm giving your method a shot, albeit hedging my bets.

I've advertised a property today via Letting Supermarket which is now on Rightmove, feel free to critique - see >>> http://goo.gl/yoaDLM
.

Alan Loughlin

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10:31 AM, 13th September 2014, About 10 years ago

ok, have had a look, my only comment would be to give it more kerb appeal, it is true that most people decide before going through the door, the appearance that I can see from the photo is a little sad, would cost very little to tidy up the front and give it the wow factor from the road. as regards rent I do not know the area, I always aim high, this deters the dross, and then If there is a good prospective tenant negociate a discount linked to prompt payment, a carrot and stick approach, all the tenants I have had to deal with relish the idea of paying less upfront, and the fact that they are not going to get it back seems not to matter. I keep a record of all fees charged (£495.00 for a house) and these roughly equate to the costs of cleaning and decorating and minor repairs, the way I see it is tenants cause tis cost so should pay for it. call the fee an admin fee, non-refundable and put 00 in the deposit section of the contract, I keep this money separate and just use it for paying the cleaner and decorator etc. another tip, change the locks to a suite, this means that one master key opens all, but individual keys only open each property, this saves time and money, these keys are non-copiable, copies can be obtained but only by landlord with master, this keeps control of access. good luck

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