Investigation exposes level of lost deposits

A new BBC investigation has examined the problem of money disappearing from insurance-based Tenancy Deposit Schemes.

The investigation features input from long-time renting reform campaigner Ajay Jagota, whose own research revealed that landlords and letting agents took more than £1m from these schemes in 2016.

Deposit Schemes

£2.4bn of the UK’s £3.2bn tenancy deposits are held in these schemes, whereby deposit money is handed over by tenants and kept by landlord or letting agents.

The BBC programme looks at the case of Cornwall letting agency Premier Property Management, which owes clients over £35,000 in deposit money. At time of broadcast, the firm was listed as a member ARLA Propertymark, the regulatory body designed to: ‘Reassure all of those renting and letting out property that agents who display the Propertymark Protected logo offer better protection for their clients.’[1]

However, the listing disappeared from ARLA’s website straight after the programme, despite Premier Property continuing to advertise itself as a member of the organisation. The firm this week promised that when renters see their logo, they can rest assured that, ‘they and their money are safe.’[1]

Appalling

MP Olivier Colvile, who has campaigned for tenants’ rights, called the case appalling, stating: ‘clearly there needs some action to be taken on all of this.’[1]

The BBC’s investigation was broadcast on the same week as letting agent Tahir Kan was put behind bars for 45 months by Bolton Crown Court, for illegally holding onto £130,000 worth of deposits paid by tenants.

This conviction has taken the number of tenancy deposits stolen so far in 2017 to £146,000.

Milestone

Jagota, founder of North East sales and lettings firm KIS, noted: ‘It’s a significant milestone that the mainstream media is picking up on a major scandal which could engulf the entire private rented sector at any second.For too long it has been the letting industry’s dirty little secret that deposits can be used as personal piggy banks which firms can dip into whenever they see fit.’[1]

‘In the age of insurance, there is no need for cash deposits to be taken at all, with landlords better off protecting their properties against careless tenants in the same way they would protect their own homes. It’s ironic that all of this news comes the same week ARLA has relaunched itself as the knight in shining armour who ‘stands for protection for the consumer’.[1]

‘That doesn’t seem to have happened on this occasion. In fact, all that has happened is any reference to this company, whose customers put their faith in because they were ARLA members, disappearing from the ARLA website faster than their deposits!’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/bbc-investigation-exposes-level-of-disappearing-deposits.html