With
just 50 days to go before the introduction of mandatory
tenancy deposit protection some 800,000
residential landlords
across England & Wales should be preparing now for
the 6 April start date, the National Landlords Association
has warned.
With the implementation of new laws private landlords
who take deposits from tenants will be required to join
an approved tenancy deposit scheme. Although the number
of landlords who have signed up a scheme is rising, many
landlords remain unaware of the new rules, said NLA.
In
all they will cover £1.2bn of
tenants' money which is currently held by landlords.
‘Burying your head in the sand is not a viable
option. From 6 April, any landlord who takes and holds
a deposit in respect of an assured shorthold tenancy
will be required to protect it through a government-authorised
scheme’, warned NLA chairman David Salusbury. ‘It
will be the law of the land, and there is no escape short
of not taking a deposit. The penalties for non-compliance
are severe’.
The NLA is sponsor of a government authorised insurance
based tenancy deposit solutions. Although fees and other
details have yet to be announced, landlords can register
an initial interest.
‘Not surprisingly, we’ve seen the strongest
interest and the greatest level of preparedness among
members of landlord associations. However there is clearly
a large number of landlords who have little or no knowledge
of tenancy deposit protection and are not prepared at
all. Some may intend to rely upon a letting agent to
ensure that the deposits are protected in accordance
with the law, but according to information from Communities & Local
Government, only 23 per cent of landlords use an agent’,
said Salusbury.
‘So
there is clearly a very substantial number of the 800,000
residential landlords in this
country
who need to learn about deposit protection and choose
a suitable scheme.
‘Remember, it’s the personal responsibility
of the landlord to comply, not the agent’s. The
court can order a landlord who fails to protect a deposit
to pay it into the custodial scheme and to hand over
to the tenant three times amount of the deposit. The
landlord will also be unable to regain possession of
the property using notice only grounds for possession
under Section 21 of the Housing Act 1998 – so the
consequences can be very serious’.
The NLA backed Tenancy Deposit Solutions will provide
an insurance backed tenancy deposit scheme for landlords
and is the only scheme designed primarily for landlords
who wish to continue to hold deposits.
‘Taking and holding a deposit is one of the few
safeguards available to landlords, and 82 per cent of
landlords do hold them. While a minority of landlords
may either be discouraged from taking a deposit, or indeed
may be discouraged from letting their property, the majority
need to familiarise themselves with the new rules and
choose the best scheme for their purposes’.
