Posts with tag: tenancy deposit

Letting Agent Banned for Failing to Protect Deposits

Published On: February 13, 2020 at 10:15 am

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Letting Agent Banned for Failing to Protect Deposits

A letting agent who failed to protect £28,000 worth of deposits and rent has been banned from the business for five years after her lettings agency went into liquidation.

Jane Hipkin Russell, the sole director of Jonathan Waters Estate Agents was first investigated in August 2018 after the business went into liquidation. The investigation found that Russell had contributed to the business’ collapse by failing to comply with legislation requiring tenancy deposits to be placed in a recognised scheme.

It was revealed that there was no record of 11 tenants’ deposits, totalling around £12,000 and a further £20,000 worth had not been paid into a government-backed deposit scheme.

In addition, the business had failed to transfer a further £7,000 worth of rent payments to their respective landlords and had instead used the cash to fund the running of the business. 

Effective as of Friday 14th February, Russell will be disqualified from acting as a director or directly, or indirectly being involved in the promotion, formation or management of a company.

Rob Sheils, senior investigator for the Insolvency Service, commented: 

“A fundamental part of Jane Russell’s role was being responsible for safeguarding money on behalf of her tenants and landlords, something she failed to do prior to the company falling into liquidation.

“This disqualification should serve as a deterrent to other directors who safeguard money from doing likewise.”

AIIC suggests deposit cap could lead to more disputes

Published On: August 23, 2017 at 9:10 am

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The Government’s plan to introduce a cap on deposits paid by for UK tenants in the private rental sector could actually lead to an increase in formal deposit disputes, according to a new claim.

Earlier this Summer, as part of the Queen’s Speech, the Government unveiled the draft Tenants’ Fees Bill, which included details of the upcoming ban on letting agent fees charged to tenants. In addition, the ‘Speech gave the first mention of a cap on holding and security deposits.

Deposits

It has been mooted that holding deposits are capped at no more than a week’s rent and security deposits at no more than one month’s rent. This is down from the current level of two months.

The National Landlords Association predicts that almost 40% of present security deposits exceed the proposed one month rent cap. An entire draft of the Tenants’ Fees Bill is expected to be published later in 2017, with full legislation set to be introduced in 2018.

However, the Association of Independent Inventory Clerks (AIIC) believe that while a cap on deposits will help tenants initially, the lower sums required could lead to a rise in the number of formal deposit disputes.

Disputes

Danny Zane joint chair of the AIIC, noted: ‘A cap on security and holding deposits is certainly more positive than an outright ban as has been proposed for up front letting agent fees charged to tenants. However, we are concerned that as tenants will be committing less money to cover damages at the start of a tenancy, they may take a more laissez faire approach to the rental property, and landlords could therefore be left with more damage and repairs to deal with.’

AIIC suggests deposit cap could lead to more disputes

AIIC suggests deposit cap could lead to more disputes

Should this scenario arise, landlords are more likely to make deductions from a tenancy deposit. Of course, this could lead to more formal deposit disputes.

Emma Glencross, joint chair of the AIIC, went on to say: ‘We understand that some tenants are finding damage and holding deposits unaffordable, and a cap on deposits will certainly help them when looking for a rental property. We hope that the lower sums of money involved don’t encourage renters to take less care of their rental properties. Both landlords and tenants want to avoid deposit disputes at all costs and this Government initiative could, in some cases, have unintended consequences.’

Importance of Inventory

Regardless of the proposed cap on fees, the AIIC has moved to once again stress the importance of a professionally compiled inventory. A photographic inventory can certainly reduce the chance of deposit disputes.

Mr Zane added: ‘An impartial, professional inventory comprehensively details the condition and contents of the property at the start and end of the tenancy. They help to protect tenants from unfair charges and can also stop landlords being left out of pocket.’[1]

[1] http://www.propertywire.com/news/uk/planned-uk-deposit-cap-lead-disputes-says-industry-trade-body/

 

 

UK landlord to scrap rental deposits

Published On: May 25, 2017 at 8:51 am

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A UK landlord has moved to scrap rental deposits from 14th June 2017 for new residents. Get Living is also returning security deposits to existing residents, which will see roughly £3million released back to the UK economy.

Launched in May 2013, Get Living is the force behind the country’s biggest single-site PRS scheme at the old London 2012 Athlete’s Village – now known as East Village, E20. This site is home to over 3,000 tenants in 1,439 homes.

No Deposits

From 14th June, new residents who pass referencing checks or have a guarantor in place will not be required to pay a security deposit. In addition, as a reward for residents that have taken good care of their home and paid rent on time, Get Living will waive any cleaning costs should these amount to less than a week’s rent.

Present Get Living residents will have their deposits returned to them from early July 2017. Firstly, deposits will be returned to residents who have lived in the same East Village residence for longest, with this process expected to be complete by the end of the year.

UK landlord to scrap rental deposits

UK landlord to scrap rental deposits

Neil Young, CEO of Get Living, observed: ‘Get Living was the first to revolutionise the rental experience in the UK by removing agency fees and introducing longer term tenancies as standard. We know that the cost of living can be high so, as a responsible landlord with a long-term perspective, it is important for us to be able to identify and address areas where we can alleviate the burden on our residents. Scrapping security deposits as a pre-requirement and returning deposits to current residents is yet another step we are taking to show we are firmly on the side of renters.’[1]

‘We launched Get Living four years ago this month and in that time our average deduction from deposits has been just a few days’ rent, with the majority of our residents getting their deposits returned in full. We have great relationships with our residents and, given they are taking such good care of our homes, why should we hold six weeks’ rent? We can do this at Get Living because we have the scale and track-record to know it will work.

“Where we have led – with no fees and longer tenancies – others have followed. We hope deposit-free renting becomes the norm,’ he added.[2]

[1] http://www.propertyreporter.co.uk/landlords/uk-landlord-scraps-rental-deposits.html

 

 

 

London Living Rent to help renters save for a deposit

Published On: September 20, 2016 at 11:32 am

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Details of plans for a new type of tenancy for new build, affordable homes in London have been confirmed by the new Mayor, Sadiq Khan.

The programme-London Living Rent-has been proposed in order to assist average earners in the capital save for a tenancy deposit. This is through offering them a below market rent, based on a third of average household incomes in each London borough.

Savings

These homes will be offered to both low and middle-income households, earning between £35,000 and £45,000 per year and currently renting. It is forecasted that in London, this will see rents for a two bed flat fall below £1,000, in comparison to average rents of £1,450.

In addition, Mr Khan has put forwards his intention to protect the capital’s stock of social housing for people in low incomes. Khan has pledged to work closely with housing associations and boroughs to deliver these homes.

‘We know that fixing London’s housing crisis won’t happen overnight and we need to do everything we can to help Londoners who are struggling to pay their rents. That’s why I’m working with housing associations and councils to build new homes for London Living Rent, homes that will offer hard working, low and middle income families an alternative to renting privately so they can get by and save for a deposit.’[1]

London Living Rent to help renters save for a deposit

London Living Rent to help renters save for a deposit

Committed

David Montague, chief executive of L&Q and chair of G15, believes firms are committed to working with Mr Khan to make London more affordable for renters.

Montague said, ‘we want to provide new homes in a way which doesn’t involve setting rents beyond the reach of ordinary Londoners. This can be achieved as part of a mainstream grant funded affordable housing and regeneration programme in which housing associations retain flexibility over rents and asset management. A new agreement could include a move away from rent conversions on existing social rented homes where we agree that these homes are fit for purpose.’[1]

The new Mayor of Hackney, Phil Glanville, said he has already made a pledge that Hackney will be the first borough to build 500 homes for London Living Rent. He noted: ‘Hackney is already building more social housing than anywhere else in the capital, but it’s also vital that there are more homes which Londoners on middle incomes can afford to rent and buy.’[1]

‘The London Living Rent will help people who work hard but are getting priced out of our city, which is why I’m proud that my first act as Mayor is to pledge that Hackney will be the first borough to see 500 homes built at this affordable level. We must make sure that all the people who make London the world’s greatest city, whatever their background can afford to live here and take advantage of its opportunities, so I’m delighted to be working with Sadiq Khan to help make that happen,’ he added.[1]

[1] http://www.propertywire.com/news/europe/new-tenancy-scheme-launch-london-help-renters-save-home-deposit/

 

A Landlord’s Guide to Tenancy Deposits

Published On: September 6, 2016 at 2:04 pm

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Tenancy Deposits Guide for Landlords

Buy-to-let landlords have a legal responsibility to protect any deposit that they receive from a private tenant.

In England and Wales, is an obligatory requirement for landlords to protect any deposit received for an assured shorthold tenancy (AST) that started on or after 6th April 2007 in a Tenancy Deposit Scheme.

A Tenancy Deposit Scheme is a Government approved, independent third party which is permitted to protect tenants’ deposits for the duration of the tenancy.

Landlords in England and Wales must register deposits in one of three Government approved schemes:

  • Tenancy Deposit Scheme (TDS)
  • MyDeposits
  • Deposit Protection Scheme (DPS)

Landlords have a duty to use a Tenancy Deposit Scheme even if deposits are paid by a third party-for example through a rental deposit scheme.

For renters not using an assured shorthold tenancy, landlords can accept items of value as a deposit as a replacement for monies. However, these items are not protected by a scheme.

Prescribed information

Under the Housing Act 2004, once a landlord or letting agent has protected a deposit under one of the three schemes, the tenant must be provided with information relating to this protection within 30 days. This is known as the prescribed information.

Information provided must include:

  • the address of the rented property
  • the amount of the deposit taken
  • what scheme the deposit has been protected under
  • the name and contact details of this scheme, plus its dispute resolution service
  • name and contact details of any third party involved with the deposit
  • what would constitute some or all of the deposit being held
  • how the tenant can apply for the deposit back
  • what to do in case of a deposit dispute

Failure to adhere to deposit protection obligations could see landlords fined up to three times the deposit amount. In addition, landlords would be unable to serve a section 21 notice to regain possession of their property.

A landlord's guide to Tenancy Deposits

A landlord’s guide to Tenancy Deposits

Disputes

Should a dispute arise at the conclusion of the tenancy agreement, the chosen Tenancy Protection Scheme offers a free dispute resolution service in order to solve the issue. This is not mandatory and both the landlord/agent and tenant must agree to use the service.

The scheme will then make an impartial decision, with the deposit being allocated accordingly.

Scotland and Northern Ireland

There are separate Tenancy Deposit Schemes for landlords in Scotland and Northern Ireland.

Scotland

Scottish landlords and letting agents are bound under the Tenancy Deposit (Scotland) Regulations 2011. Tenancy Deposit Schemes came into force in Scotland on the 2nd July 2012.

In Scotland, there are also three Government approved schemes, which are:

  • Letting Protection Service Scotland
  • Safedeposits Scotland
  • MyDeposits Scotland

Depending on when the landlord took a deposit, this will alter when they have to comply with legislation. The table below shows key dates for Scottish landlords and under what regulation number they must adhere:

Date deposit received Regulation Duty to comply
1 Deposit received prior to 7 March 2011 and tenancy renewed by express agreement or on tacit relocation on or after 2 October 2012 and before 2 April 2013

In any other case

 Regulation 47(a)

Regulation 47(b)

 Within 30 working days of renewal

By 15 May 2013
2 Deposit received on or after 7 March 2011 and before 2 July 2012 Regulation 48 By 13 November 2012
3 Deposit received on or after 2 July 2012 and before 2 October 2012 Regulation 4 By 13 November 2012
4 Deposit received on or after 2 October 2012 Regulation 3 Within 30 working days of the beginning of the tenancy

[1]

Under Regulation 42 of the Tenancy Deposit (Scotland) Regulations 2011, landlords must provide tenants with the prescribed information within the timescale indicated above.

Northern Ireland  

In Northern Ireland, landlords must protect deposits taken on or after 1st April 2013 in a Tenancy Deposit Scheme. Deposits taken before this date need not be protected.

There are two types of Tenancy Deposit Schemes available-Custodial and Insurance.

The three approved, registered schemes are:

  • Tenancy Deposit Scheme Northern Ireland
  • MyDeposits Northern Ireland
  • Letting Protection Service NI

All deposits must be protected within 14 days of receipt and prescribed information must be given to tenants within 28 days of this date.

Should landlords provide accommodation for university students, any deposits received on or after 1st April must be protected in an approved Tenancy Deposit Scheme. This is regardless of who actually pays the deposit.

Further information on Tenancy Deposits can be found at the Government website.

[1] http://www.gov.scot/Topics/Built-Environment/Housing/privaterent/landlords/tenancy-deposit-schemes#Tenancy

Tiny Amount of Tenant Deposits Not Claimed

Published On: August 6, 2015 at 2:42 pm

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Tiny Amount of Tenant Deposits Not Claimed

Tiny Amount of Tenant Deposits Not Claimed

Just a small amount of tenancy deposit money is not claimed, according to the Deposit Protection Service (DPS).

The DPS provides a custodial service that physically banks money.

It revealed that only 0.2% of deposit money has been unclaimed in two years.

Managing Director of the DPS, Julian Foster, says: “In England and Wales, there is no deadline by which tenancy deposits must be claimed.

“As a result, the DPS looks after the funds indefinitely, ready to respond to any claim and repay any monies in a matter of days.

“However, because of the communications and repayment systems that we have in place, the actual value of unclaimed deposits remains very low.

“At the last count, less than 0.2% of the more than £1 billion of deposits we protect had been unclaimed for more than two years.

“We also run publicity campaigns to remind people to participate in the Joint Deposit Repayment process and to get in touch if they think their deposit is still with us.

“The DPS custodial scheme is a free service to both landlord and tenant and is paid for from the interest generated while we protect deposits.”1 

1 http://www.propertyindustryeye.com/just-0-2-of-tenants-money-goes-unclaimed-says-dps/