Posts with tag: tenancy deposits

Landlords Should Beware of No Deposit Insurance, Warns White Paper

Published On: June 29, 2017 at 9:18 am

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Landlords should beware of no deposit insurance, warns a new white paper from mydeposits, as tenancy deposit schemes celebrate ten years since their introduction across England and Wales.

Tenancy deposit schemes provide landlords with greater protection during the lettings process, should the tenant breach the terms of the tenancy agreement, such as causing damage or not paying the rent, as they allow landlords to make appropriate deductions from the deposit.

Landlords Should Beware of No Deposit Insurance, Warns White Paper

Landlords Should Beware of No Deposit Insurance, Warns White Paper

It is also a legal requirement for landlords to protect any deposits they take from a tenant in one of the three Government-approved schemes.

However, tenancy deposits have come under fire recently, with the Government announcing plans to cap security deposits at one month’s rent.

Some landlords are now seeking alternative no deposit insurance, which offers a deposit-free solution, in order to protect themselves and their tenants.

But Eddie Hooker, the CEO of Hamilton Fraser, which is the parent company of mydeposits, is not entirely convinced by some of the products on offer.

His firm has compiled a 14-page white paper that reviews how these no deposit insurance products operate versus traditional cash tenancy deposits.

Read the full white paper here: https://www.mydeposits.co.uk/wp-content/uploads/Deposit-or-no-deposit-insurance-What-we-need-to-know-1.pdf

Hooker says: “There are now several no deposit insurance products that offer a solution whereby a tenant can rent a property without having to put down a deposit. Despite the initial attraction, I have been unable to find clear answers to some pertinent questions. Landlords and tenants entering into such contracts should do so with their eyes wide open.”

More than four million individual deposits are now protected by tenancy deposit protection schemes, and dispute levels have dropped to less than 2% of all tenancies.

“The no deposit products use the 2% dispute levels as proof that they can keep their claims and premiums low, but they are misusing the statistics,” Hooker explains. “In fact, more than 40% of deposits are returned to the tenant with an agreed deduction. That means at least 40% of landlords will have to make a claim on their insurance to cover costs.”

He says that he can see the merits of an alternative to deposits, but points out that processing claims costs money and these costs get added to the overall premium.

Hooker concludes: “Like most insurance products, the no deposit options reserve the right to subrogate their losses from the party responsible, so does that mean the tenant will be pursued for a claim that they may or may not be responsible for? Will tenants start to receive red letters, black lists and court judgments for missing payments?”

Let us know what you think of alternative no deposit insurance.

Students in Scotland told to reclaim their tenancy deposits

Published On: May 17, 2017 at 3:18 pm

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With the end of the academic year fast approaching, student tenants are being urged to remember to reclaim their tenancy deposit, once their agreement comes to its conclusion.

New research from SafeDeposits Scotland reveals that many students north of the border prove surprisingly forgetful!

Unclaimed Deposits

At present, there are 188 tenancy deposits remaining unclaimed by students enrolled at Scottish colleges and universities. These collectively total almost £62,000.

The research was carried out by looking at all tenants who have a university email address registered against their name on the deposit account. It reveals that St Andrews University was the largest contributor to the amount currently outstanding.

103 of the as yet unclaimed deposits came from students at the oldest university in Scotland- with tenants out of pocket by an average of £406 each.

Students in Scotland told to reclaim their tenancy deposit

Students in Scotland told to reclaim their tenancy deposit

Fair Deal

Victoria Nixon, operations manager at SafeDeposits Scotland, observed: ‘It’s interesting to see the disparity in rates of deposits left unclaimed by students across the country and the reasons behind it may be complex and varied.’[1]

‘Some people may simply forget, some might think they won’t get it back, and others might think it’s an inconvenience. But in reality; the process is straightforward and should disputes over deductions arise, an independent adjudicator will work to find an amicable resolution for all parties,’ Nixon continued.[1]

Concluding, she said: ‘Tenancy deposit schemes like SafeDeposits Scotland were introduced to help tenants and landlords get a fair deal at the end of a lease agreement and claiming your deposit is straightforward.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/student-renters-urged-to-reclaim-tenancy-deposits

 

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

Published On: April 18, 2017 at 9:19 am

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The recent conviction of a letting agent who stole £15,000 worth of tenancy deposits has taken the total value of deposits that are known to be stolen in the first quarter (Q1) of 2017 to £310,000.

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

The Founder and CEO of Keep It Simple Group (KIS), Ajay Jagota, has taken this opportunity to campaign against deposits in the private rental sector.

Thirunga Damayantharan, a Croydon-based letting agent, was sentenced to 19 months in prison last month, after being found guilty of stealing a number of tenancy deposits over a six-year period.

Jagota has long been campaigning for an official Government response to a series of crimes and misdemeanours in the tenancy deposit industry, so it is no surprise that he has welcomed the news that the Government’s consultation into the letting agent fee ban will also consider reforming the way tenancy deposits are paid.

Jagota believes that a more effective way to improve the private rental sector would be for monetary deposits to be scrapped.

His firm KIS was the first letting agent to abolish monetary tenancy deposits, replacing them with a one-of-a-kind insurance policy.

Jagota explains his stance: “The Government’s announcement that deposit reform will form part of the letting agent fees ban consultation led to the usual flurry of outrage from the usual suspects, but the industry needs to accept that change is coming.

“It’s absolutely true that deposits are a financial burden on renters in need of minimising, and it’s in the letting industry’s interest as much as anybody else’s that they are not only minimized, but eliminated altogether. We exist to help landlords find and keep good tenants!”

He continues: “No one is saying that asset protection for landlords isn’t essential – we only look to research this week claiming that a third of tenants wouldn’t own up to damaging their rented property – but there are better ways of doing it, and replacing cash deposits with insurance policies is one.

“I can already see a path to a place where it costs agents money whenever they take a cash deposit. The chair of one of the tenancy deposit schemes seemed to be hinting in a recent interview that as ongoing low interest rates are making it harder to operate, he wants to start charging for his services. You might think that will never happen, but a lot of people thought that a letting agent fee ban would never happen.”

Jagota insists: “Whether by legislation or technology, the sector is going to change. It is time to recognise the sector’s associations who represent it have a poor track record of lobbying Government, and it is now time to embrace any opportunities from the forthcoming changes.”

The DPS Celebrates 10 Years of Custodial Deposit Protection

Published On: April 11, 2017 at 9:32 am

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The Deposit Protection Service (The DPS) is celebrating ten years of custodial deposit protection, as it marks the tenth anniversary of its creation.

To help provide security and peace of mind to both landlords and tenants over the course of their tenancies, the Government included measures in the Housing Act 2004 that require landlords to protect tenants’ deposits in a third-party scheme.

The DPS Celebrates 10 Years of Custodial Deposit Protection

The DPS Celebrates 10 Years of Custodial Deposit Protection

When the legislation was implemented on 6th April 2007, The DPS offered England and Wales’ only custodial deposit protection scheme – whereby deposits are securely looked after, rather than retained by a landlord. Over the past ten years, it has protected more than 4.9m deposits.

The Managing Director of The DPS, Julian Foster, comments on the scheme’s success: “Over the last decade, millions of landlords and tenants have relied on us as the UK’s longest-running custodial scheme for security, peace of mind and the guarantee of fairness when tenancies come to an end.

“This accomplishment is largely down to the hard work and great skills of the diverse team we have, whether it’s our highly-rated contact centre, our adjudicators, or our education and training teams.”

He adds: “The next decade promises to be even more exciting, with digital developments promising an even easier and rewarding process for letting agents, landlords and tenants.”

Yolanda Garrett, an Associate Partner of Statons Estate Agents, says: “It’s been a fascinating ten years for the rental sector, and The DPS has played a massive role in driving up standards and improving the experiences of renters, agents and landlords.

“Happy birthday and well done everyone that works there, and especially the wonderful Kerry Jones, our account manager, who will always find the time to speak with me. When I need her help, she supplies me with solid advice to pass to my landlords as soon as she can.”

Daren King, the Head of Tenancy Deposit Protection at The DPS, who has worked there since day one, rounds up: “It’s been amazing to be part of The DPS right from the very start.

“We kicked off with high standards, and things have improved every year that I’ve been here. It’s exciting to think how different things will be in another ten years, and I’m really glad to be part of a team that plays such a leading role in the industry.”

The DPS Donates £19,000 to Charities in Brighton and Devon

Published On: March 20, 2017 at 11:36 am

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The Deposit Protection Service (DPS) has donated £19,000 to charities in Brighton and Devon.

A home and its grounds in Honiton, Devon, which are run by charity SeeAbility, are being refurbished following a £7,993 donation.

The DPS Donates £19,000 to Charities in Brighton and Devon

The DPS Donates £19,000 to Charities in Brighton and Devon

A further £11,000 is being used to fund specialist support from YMCA DownsLink Group – Youth Advice Centre in Brighton and Hove.

The Head of Tenancy Deposit Protection at the DPS, Daren King, comments: “The DPS has given over £200,000 to good causes since we established our charity fund in 2014.

“We believe that everyone has the right to live life to the full, and we were really excited to visit Devon to see how our donation is helping SeeAbility’s fantastic work.”

He adds: “We’re also delighted to be supporting YMCA DownsLink Group – Youth Advice Centre’s fantastic work in helping LGBT young people find a home in Brighton and Hove.”

SeeAbility aims to support people with a combination of sight loss and visual impairment, learning difficulties and physically difficulties, to reach their aspirations, and has over 20 residential homes and supported living facilities across the south of England.

The Partnership Executive of SeeAbility, Rebecca Compton, says: “The paved path that encircles the property in Honiton has become uneven, creating great difficulty for people with sight loss and wheelchair users.

“We’re really grateful to the DPS for this generous donation, which has helped us repair the path and undertake other vital improvements that will help our residents live independently.”

YMCA DownsLink Group – Youth Advice Centre is a “one-stop shop” for advice and information for young people aged 13-25 in the City of Brighton and Hove.

The Advice Services Manager at YMCA DownsLink Group – Youth Advice Centre, Julia Harrison, explains their cause: “LGBT young people account for 13% of the total number of clients accessing our housing service, with a 50% increase in transgender clients since April 2016.

“The DPS’s generous donation will help reduce youth homelessness and empower LGBT young people to be aware of their rights and responsibilities as tenants.”

The DPS’s fund assists charities that support the homeless and those who need help to live independently, and good causes across the UK have benefitted from donations from the DPS and its sister organisations, the Letting Protection Service Scotland and Northern Ireland, over the last three years.

Charities in the housing sector can apply for funds via this link: www.depositprotection.com/charity

Applications for the next round of awards must be submitted by 31st March 2017.

Lettings Administrator who Stole £14,000 in Tenants’ Deposits Spares Jail

Published On: March 13, 2017 at 9:49 am

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A lettings administrator who stole more than £14,000 in tenants’ deposits has been spared jail.

Lettings Administrator who Stole £14,000 in Tenants' Deposits Spares Jail

Lettings Administrator who Stole £14,000 in Tenants’ Deposits Spares Jail

Julie Feilden, 51, stole the funds over a six-year period and has been given a six-month suspended prison sentence. She has also been ordered to complete 120 hours’ unpaid work and pay costs of £1,250. She admitted 13 charges.

Feilden was employed by Smiths Gore in Newmarket, Suffolk, where she was responsible for collecting tenants’ deposits. Where cash was accepted, Feilden was required to log the funds and keep them in the stationery store under lock and key. She had the keys to the store, and part of her job was to bank the money and complete the paperwork for the tenants’ deposits.

Ipswich Crown Court was told that, in 2015, redundancies were made at the firm, which included Feilden’s role. At the end of the year, the business was sold to Savills.

Although she was made redundant, Feilden asked to take the books home to get them up to date.

It took several months for the firm to retrieve the books, and it was then that the thefts were discovered.

When police interviewed Feilden, who has no previous convictions, she made full admissions.

Representing herself, Feilden told the court she was “very sorry” for what she had done.

Savills acquired the 31-branch agent in 2015 for a staggered payment of up to £40m. The announcement at the time said that Smiths Gore had an unaudited revenue of £30.8m and gross assets of £14.9m, with profit before tax and partners’ drawings at £6.3m.

Discussing the theft of tenants’ deposits, a spokesperson for Savills says: “Savills can confirm that Julie Feilden was an employee of Smiths Gore, based in its Newmarket high street office from 2010-15, when these offences took place.

“Smiths Gore was subsequently acquired by Savills. No clients suffered a loss as a consequence.”

Landlords, remember to stick to the law where tenants’ deposits are concerned: /landlords-guide-tenancy-deposits/