The Law Governing Tenancy Deposits Is Changing - Are You Ready?
5th April 2007
Most people know that cash deposits are frequently given to Landlords and Agents against potential damage to property or non payment of rent, and most of the time the deposit is distributed or returned at the end of the Tenancy without dispute. Sadly however there is the occasion when an unscrupulous Landlord or Agent disappears with the Tenants deposit. I am sure that you will have seen such occurrences well documented in the 'Press' as we all know how much people 'love to hate Estate Agents' !
In an attempt to minimalise such bad practice the Government has for several years muted the idea of a central body holding all Tenant deposits but the concept had many flaws. The Association of Residential Letting Agents (ARLA) however 'took the bull by the horns' and set up the Tenancy Deposit Scheme for Regulated Agents (TDSRA) providing Tenants with the assurance that their money is held securely and that at the end of the Tenancy any dispute regarding the return of the deposit will be settled swiftly and fairly by an Independent Case Examiner.
Although the ARLA scheme has been well supported by many members joining it does not encompass the whole industry and as is often the case with self governing bodies, the 'rogue traders' have failed to comply.
Government has therefore pushed through legislation amending the Housing Act and compelling all Agents and Landlords to join a statutory scheme. From April 6, 2007 both Landlords and Agents will only be allowed to take a Tenants deposits if that deposit is protected by a Tenancy Deposit Scheme.
Two types of scheme will be introduced, a custodial scheme and an insurance scheme. They both entail registration by arduous paperwork and a joining fee. Penalties for non compliance will include fines of up to three times the deposit amount and the Landlord will find it difficult to repossess his property.
If you are a Landlord or are contemplating letting your property don't be caught out by this new and potentially confusing and restrictive legislation. Barton Wyatt as members of ARLA, NAEA and RICS are already regulated Agents and will continue to hold deposits under the insured scheme.
If you are a Tenant, be assured that your deposit money is safe.
Either way, for all of your letting and renting needs, call Barton Wyatt for a professional service, we know our business.
Joanne Scott, Lettings Manager, Barton Wyatt.
01344 843000
js@bartonwyatt.co.uk
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