Posts with tag: tenancy deposits

Landlords Must be Careful with Tenancy Deposit Deductions

Published On: March 10, 2017 at 10:22 am

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Landlords and their letting agents must be careful when claiming tenancy deposit deductions if they cannot prove what they’re claiming for, warns the Association of Independent Inventory Clerks (AIIC).

Landlords Must be Careful with Tenancy Deposit Deductions

Landlords Must be Careful with Tenancy Deposit Deductions

The organisation’s warning arrives following a recent court case in Bristol, in which a group of tenants claimed back over £750 in tenancy deposit deductions taken by their letting agent.

Six students from the University of Bristol took letting agent Digs to court after the firm, acting on behalf of a landlord, informed the tenants that £756 would be deducted from their deposit.

The agent claimed that the tenancy deposit deductions were for cleaning and a full repaint of the property.

One of the tenants, Ed Straw, disputed the tenancy deposit deductions and took Digs to court, using photographic evidence to support the case.

Digs was subsequently ordered to repay the charges in full, plus interest and court costs.

The Chair of the AIIC, Patricia Barber, comments on the case: “It’s clear from this instance that tenants are becoming increasingly savvy and persistent – they won’t put up with deposit deductions that they feel are unjust.

“Although it is only a minority, those agents and landlords who do charge for things they can’t prove should think twice about this practice. Alongside being immoral, it could cause financial and reputational damage to a business.”

The AIIC highlights the tenant’s use of photographic evidence to prove that the property was cleaner by the end of the tenancy than it was at the start, and that a full repaint had not taken place.

“This is why independently compiled inventories are so important for landlords, agents and tenants,” insists Barber. “Photo inventories allow all parties to make a fair comparison of the property’s contents and condition at the beginning and end of the tenancy.”

She adds: “If the offending letting agency had provided a detailed inventory to back up their deductions, it’s highly likely this case would not have gone to court.”

A comprehensively and independently compiled inventory reduces the risk of a tenancy deposit dispute, and can provide peace of mind for both parties.

This guide explains how to create a thorough and professional inventory: /guide-compiling-good-inventory/

Investigation exposes level of lost deposits

Published On: February 20, 2017 at 10:08 am

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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.

Investigation exposes level of lost deposits

Investigation exposes level of lost deposits

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

 

Tenancy Deposits in London Hit the Highest Level Ever

Published On: January 31, 2017 at 11:07 am

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Average tenancy deposits in London have hit the highest level ever, while the typical deposit in England and Wales continue to hover just below £1,000, according to the latest figures from The Deposit Protection Service (The DPS).

Tenancy Deposits in London Hit the Highest Level Ever

Tenancy Deposits in London Hit the Highest Level Ever

The firm’s Tenancy Deposit Ratings show that the average tenancy deposit between October and December 2016 stood at £970.18.

However, properties with London postcodes set a new all-time high during the period, with tenancy deposits averaging £1,831.14 – more than double that for areas outside of the capital (£883.21).

Julian Foster, the Managing Director of The DPS, comments: “It’s important that landlords have protection against damage and other problems that can arise when they rent out property, but tenancy deposits can be demanding sums for tenants to raise when they move.

“However, both parties can have peace of mind over the money when it is protected with The DPS, with our secure and easy processes backed up with a free, impartial dispute resolution service on the rare occasions it is needed.

“The DPS is the UK’s largest protector of tenancy deposits, and we’ve been entrusted with over 4.7m since launching a decade ago.”

Landlords, remember to stick to the law surrounding the protection of tenancy deposits: /landlords-guide-tenancy-deposits/

While The DPS’s figure for October to December represents a £154.40 increase on July to September, it is just 30p lower than April to June, with the third quarter typically experiencing a dip, as students return to rental accommodation ahead of the new academic year.

The average tenancy deposit for the fourth quarter of 2016 also represents a £21.88 rise on the same period in 2015 (£948.31) and a £117.81 increase on the fourth quarter of 2014 (£852.37).

The research found that Sunderland has the lowest tenancy deposits in England and Wales, with the average cost in the SR postcode less than three times lower (£490.13) than that in London.

Have you put your tenancy deposits up over the past few months?

The DPS’ Top Tips for Managing Deposit Disputes

Published On: January 17, 2017 at 9:17 am

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Most tenancies end without any dispute. In fact, only around 2% of those registered with The Deposit Protection Service (The DPS) need the involvement of the free, impartial Alternative Dispute Resolution (ADR) that it provides. Sadly, though, it is sometimes necessary, and the service focuses on coming to a decision that is fair to both parties. As a result, landlords need to understand how the system works and how best to make sure their view is fully heard. We asked Alexandra Coghlan-Forbes, The DPS’ Head of Adjudication, for their ten top tips for approaching disputes with tenants.

  1. Prepare in advance

Preparing for disputes starts with the inventory. We also recommend keeping records of repairs and communications with your tenants, as this can all contribute to your supporting evidence. You can find our guidance on how to create strong check-in and check-out reports on www.depositprotection.com. 

  1. Only claim for what you’re owed

Many landlords claim for the full amount of the deposit, instead of asking for a deduction that is fair to both themselves and the tenant. Our adjudicators will only award what they think is a reasonable amount to landlords.

  1. Read the guidance we send you
The DPS' Top Tips for Managing Deposit Disputes

The DPS’ Top Tips for Managing Deposit Disputes

We’ll send you information as part of the dispute process that’s crucial to understanding the procedure and what’s expected of you and your tenant. Make sure you read it so you know what you need to do. 

  1. Consider your evidence

Think carefully about the types of evidence you provide. We’ll need to see the tenancy agreement, but good quality photographic or video evidence, combined with invoices and witness statements, help adjudicators build a picture of the condition of the property at the start and end of the tenancy.

  1. Don’t miss deadlines

Dispute resolution operates to set timescales, so make sure you respond in the time required. Check your spam folder regularly, and if you’re going away, don’t forget to check your inbox, as not seeing an email isn’t a valid reason for missed deadlines.

6 .Don’t put off completing your paperwork!

Your paperwork is a key part of your evidence, so don’t leave it to the last minute to complete it, as this increases the chances you’ll make a mistake or omit something important.

  1. Make sure your documents are delivered on time

If you’re sending important documents, be sure to use a service that confirms they’ve reached us, such as recorded or special delivery. Don’t forget, dispute deadlines are for arrival of documents, not sending, so allow enough time for delivery. If you’re unsure if something has reached us, you can always call us to find out.

  1. Consider using a third party

We all lead busy lives, and if you’re not available while a dispute is taking place, you can authorise a third party to communicate with us on your behalf, nominating them in writing. All payments, decisions and automated notifications will still be sent to you, but you’ll benefit from the convenience of your third party being able to respond in your place.

  1. Got a problem? Let us know

If you’ve a problem with any aspect of the dispute resolution process, get in touch. We can advise you on any part of our processes you’re having an issue with. Our goal is to reach an outcome that’s fair to everyone, so we want you to get things right.

  1. You can still come to an agreement with your tenant

It doesn’t matter what stage you’re at in the dispute resolution process, you and your tenant can still negotiate an agreement between you. We’ll still need both of you to confirm the repayment amount to us, but it’s possible to save time and effort by keeping communication going.

Property campaigner has started ‘stolen deposits totaliser’

Published On: January 13, 2017 at 2:48 pm

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Long-time anti-deposit campaigner Ajay Jagota has moved to compile what he has coined a ‘stolen deposits totaliser.’ Mr Jagota says that this will keep tabs on how much rogue letting agents have been convicted of stealing in 2017.

Rogue Agents

The first example of 2017 came this week when Julie Feilden admitted 13 counts of theft by employee at South East Suffolk Magistrates. This came after she stole almost £16,000 from her former employer, Smith Gore.

In her role as lettings administrator, Feilden was responsible for taking deposits from tenants and placing them in Government approved tenancy deposit schemes. However, she stole various amounts, ranging from £450 to £3012 between March 2010 and September 2015.

The business was subsequently acquired by Savills and was a member of industry body ARLA and subject to annual auditing.

Research from Mr Jagota revealed over £1m worth of deposits were stolen during 2016, with at least one landlord or letting agent convicted per month.

Scandal

Mr Jagota, founder of deposit-free renting solution Dlighted, noted: ‘2.4bn of the UK’s £3.2bn rental deposits are held by lettings agents, with next-to-no supervision over what happens to that money. It’s far too easy for this money to be used illegally or inappropriately and this is a huge scandal waiting to happen.’[1]

‘The worst part is, this is just the tip of the iceberg and this is not just about a handful of criminals. We’ve even been approached to assist in one major new case which will be coming to light in coming weeks. Deposit money must be placed in a completely ring-fenced account and not touched by the agent or landlord for any business purpose. But there is a common belief in the industry that to do so it completely legitimate and as a result there are doubtless countless otherwise upstanding and honest agents who misappropriating client money by mistake,’ he continued.’[1]

Property campaigner has started 'stolen deposits totaliser'

Property campaigner has started ‘stolen deposits totaliser’

Scrutiny

Jagota went on to say, ‘This is a government-backed system which is subject to no scrutiny at all. Not even the media! We’ve had respected and apparently knowledgeable journalists tell us letting agents can use deposits any way they see fit!’[1]

‘This agency was even a member of ARLA and as such would have been audited annually. But these crimes went on for five years and nothing was uncovered. I’ve tweeted them asking for an explanation but so far nothing has been forthcoming. If landlords and letting agents didn’t take cash deposits these crimes wouldn’t be possible.  And that’s why the deposit system needs urgent reform,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/property-campaigner-launches-stolen-deposits-totaliser.html

 

Higher Deposits Reinforce the Need for Good Inventories, Insists AIIC

Published On: November 10, 2016 at 11:37 am

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Higher deposits for private tenants are reinforcing the need for good inventories, insists the Association of Independent Inventory Clerks (AIIC).

The Deposit Protection Service (DPS) recently revealed that between April and June, the average tenant paid a deposit of £970.48 when moving into a rental property.

Higher Deposits Reinforce the Need for Good Inventories, Insists AIIC

Higher Deposits Reinforce the Need for Good Inventories, Insists AIIC

This is almost 5% higher than the average deposit amount recorded between January and March, and over 10% higher on an annual basis.

According to the DPS’ data, the average deposit cost in the capital rises to a whopping £1,800.

The AIIC warns that as the cost of deposits continues rising, landlords and tenants cannot afford to start a tenancy without an independently compiled inventory.

Inventories outline the condition and contents of a property at the start of the tenancy, and should be signed and agreed by the tenant at check-in.

This guide will help you create a professional and comprehensive inventory: /guide-compiling-good-inventory/

The Chair of the AIIC, Patricia Barber, says: “With the average renter now paying a deposit of almost £1,000 to rent a property in the UK, it’s vital that an independent inventory is carried out in order to protect both landlords and tenants.”

Now that there are hundreds, and even thousands, of pounds worth of deposits at stake in the average tenancy, deposit deductions or disputes at the end of a contract could be costly for both parties.

Good inventories can help landlords, or their letting agents, determine the condition of the rental property at the end of a tenancy, and any subsequent deposit deductions that need to be made.

Should a deposit dispute occur, a professional and thorough inventory will help the landlord’s chosen protection scheme make the correct and fairest judgement.

“Landlords who do not have a comprehensive inventory to hand at the end of a tenancy could make it extremely difficult for themselves to claim back funds for damages and lost items,” Barber explains.

She also advises tenants to take extra care when checking the inventory, to ensure that all items listed are present.

She says: “In the event items listed on the inventory are broken or lost, it can often be cheaper for the tenant to replace them, rather than waiting till the end of the tenancy.”

Landlords, always make sure that your inventory is thorough, professional, and easy to comprehend.