Landlords evade Tenant Deposit scheme

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by Gill Montia

High mortgage costs and low confidence in the UK property market are persuading large numbers of potential first-time buyers to sit out the credit crisis in rented accommodation.

At the same time, two leading charities have raised concerns about landlords who are choosing to ignore recent legislation to protect tenants’ deposits.

Since April of 2007, private landlords in England and Wales who offer new assured shorthold tenancies have been obliged to participate in the Tenant Deposit scheme.

This provides for a tenant’s deposit to be held in one of three official schemes, ensuring that the money is returned at the end of the tenancy, less any legitimate claims made by the landlord for unpaid rent or repairs that cannot be classified as normal wear and tear.

The Citizens’ Advice Bureau and Shelter are convinced that many landlords are still not participating in the scheme, based on the level of enquiries they are receive regarding contentious issues around deposits.

Responsibility for the scheme rests with the Department for Communities and Local Government (DCLG), however the DCLG does not taken action against landlords who are breaking the law by not signing up to a scheme.

Instead, disgruntled tenants are expected to enforce the law by bringing cases in the County Courts.

Under some circumstances the court can order a landlord to pay a tenant up to three times the value of their deposit.

The Government has no plans to introduce another method of enforcement and is satisfied that during the first year of the scheme almost one million deposits worth a collective £900 million were safeguarded.