More than three out of four landlords have not registered
for Tenancy Deposit Protection, the government-approved
tenancy deposit scheme, says the National Landlords Association.
Around 150,000 landlords have registered with a scheme,
but a large majority have yet to do so. The new legislation
has been in place for almost five months.
Landlords with
tenancies that started before the scheme was launched
on 6 April do not need to protect deposits until a new
tenancy is created, but there may be other reasons for
the relatively slow take-up.
Tenancy deposit protection applies to deposits taken
under Assured Short-hold Tenancy Agreements (ASTs) in
England and Wales. The NLA believes that some landlords
previously using ASTs could now be choosing to use alternative
tenancy agreements, such as assured tenancies, in a move
to avoid deposit protection.
David Salusbury, chairman of the NLA, says: “This
could prove to be a risky strategy for landlords. Assured
tenancies, as distinct from assured short-hold tenancies,
make it very difficult for landlords needing to recover
possession of their property.”
There is also anecdotal evidence that some landlords
who formerly took deposits are now choosing not to, thereby
exposing themselves to additional risk in the event their
tenants damage the property or default on the rent.
But landlords must also realise that a deposit is the
tenant’s money and must be properly and fairly
accounted for at the end of the tenancy.
“We know that many landlords are
unhappy about the Government imposed deposit protection
schemes', said Karl Hopkins,
a director of the Tenant
Guarantee scheme.
“Although a few landlords may have
unfairly withheld deposits in the past, in most cases
deductions were legitimate.
Now landlords who take deposits feel they are being
doubly penalised. First because all are having to do
extra work
and go to extra expense just because of the bad practice
of a few. And secondly, the rules are such that the
redress against bad tenants is substantially reduced.
“This is why we set up the Tenant
Guarantee scheme which gives landlords better protection
than a deposit without
the need to become involved in deposit protection schemes.”
