Tenancy Deposit Scheme fiasco – unilaterally terminated protection?

Tenancy Deposit Scheme fiasco – unilaterally terminated protection?

10:16 AM, 16th February 2022, About 3 years ago 5

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I use the Tenancy Deposit Scheme insurance-based scheme. In my opinion, I would sooner pay a small premium to hold the deposit than have to jump through hoops trying to get payments for damages through the custodial scheme.

If as a fait accompli you make a deduction from a deposit that you hold, the onus is shifted to the tenant to dispute it, rather than you having to make an application to an adjudicator, provide reams of evidence and spend a disproportionate amount of time dealing with the case, only to find that the adjudicator’s bias is in favour of the tenant. I have never had a single tenant who could be bothered to make an application.

Today I went to register a deposit on a block of flats that we own and noticed that there were “expired” deposits that I didn’t recognise. I checked and these were for current tenancies.

I called TDS and was told that in January they had terminated protection on a number of tenancies that were over 7 years old. Bizarrely, they claim that this was due to “Data Protection” issues and that they had intended to contact landlords to ask about the status of older tenancies, but had failed to do so, and simply suspended protection. They immediately restored protection on three tenancies, but had I not noticed, protection would have been suspended indefinitely.

This begs the question as to the position the TDS is putting landlords. Technically my tenants were without deposit protection for a month, and under the Draconian laws surrounding deposit protection could potentially have a claim against me, especially if an “ambulance chasing” solicitor got involved.

They are fully aware that they had failed to contact landlords to check the status of tenancies before cancelling them, due they say to a technical error, but have done nothing about it since and are obviously just waiting for landlords to contact them.

Many of you may be in a similar position, and I would recommend that you check to ensure that all your insured deposits are currently protected. They have offered me a free registration of a new deposit as compensation.

Brandonville


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Comments

Chris H

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12:24 PM, 16th February 2022, About 3 years ago

Wow glad you spotted that!

Sadly totally expected with any Gov scheme, thus the reason I no longer take deposits.
It is a rigged game, used to bash the private rental owners, of course all that cash making interest for the Gov is a sweet deal......

geester24

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15:13 PM, 16th February 2022, About 3 years ago

I use mydeposits and I pay the fee so I have the deposit and the power. Registering the deposit is discounted to about £17 if you are a member of the NRLA You get an email as the original term expires so you can mark it as a periodic tenancy and continue protection. You download the up to date tenant info form also.
Worth it in my view.

LordOf TheManor

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22:31 PM, 16th February 2022, About 3 years ago

Well yes, but no.....

I used to use my deposits under their insured scheme but I quit with them after they began negotiating behind my back with someone who wasn't party to the tenancy agreement when a deposit dispute arose.

Did they check who they were dealing with? No, they didn't!

My deposits had entertained a diatribe of information long before I knew this third party existed. Because they had already pre-judged that a tenant injustice had occurred albeit without any landlord evidence, they were reluctant to drop the case, so they wouldn't and didn't.

They accepted the word of an 'unknown to landlord' third party as an authority to negotiate. I questioned it of course. No dice with my deposits - so I had to abandon the arbitration process and revert to the Court Process where everything is done correctly i.e. no-one can make a statement on behalf of someone not party to the tenancy agreement or on behalf of someone in their defence without proper authorisation (which was never granted).

I issued a Small Claim and the tenants were sent the Court paperwork with the supporting information to verify my claim for their deposit deductions, complete with all my receipts for the same. All they had to do was contest my evidence.

Strangely enough, the tenants did not enter a defence when left to their own devices. The case was dismissed by Worcester County Court when the tenants' time limit expired and I therefore quit using my deposits as a result of this experience.

No reason to back track so far!

Dylan Morris

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8:37 AM, 17th February 2022, About 3 years ago

I simply lodge the deposit with the Deposit Protection Service. Haven’t had any issues at all to be honest. Managed to get a deposit repaid to me for a nightmare tenant who had 6 months arrears and damage in excess of the deposit. Tenant left no forwarding address and wasn’t responding to emails, texts etc. So didn’t go to arbitration. Had to get a standard declaration signed by my solicitor which cost a fiver. Overall very pleased with them.

DPT

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15:07 PM, 20th February 2022, About 3 years ago

Deposits becoming unprotected without notice is one of the drawbacks of the insurance based schemes. Having said that, this does sound like a complete fiasco and I would get an assurance from the scheme that they will compensate you should the tenant claim a penalty.

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