Are Deposit Protection Schemes Essential ?

Housing charity, Shelter, have revealed that complaints from tenants about problems with rental deposits have soared by 86% in the past couple of years. Shelter have explained that one out of every 20 calls to their helpline in 2011 were concerning tenants’ deposits. This comes despite the introduction of compulsory tenancy protection schemes in April 2007.

Landlords who, for whatever reason, fail to place tenants’ deposits in one of three authorised schemes within 30 days of a tenancy commencing can be taken to court and can then face a fine of between one and three times the value of the deposit. Whilst landlords may have received and benefited from a good landlord insurance quote, they may not have taken the correct responsibility where a tenant’s deposit is concerned.

Imfuna, a digital data collector, have carried out research that has shown that 57% of people in private lets were not aware of such schemes. This thus led to many landlords failing to comply with the law simply because no-one was forcing them to.

Furthermore, it’s been revealed that the average deposit for moving into a privately rented home is £979, which is a huge amount of money, particularly during a time where many families across the UK are struggling to make ends meet. This figure emphasis the scale of the issue when tenants are unfairly refused the return of their deposit as it can lead to debt whilst also making it difficult for tenants to then move home.

An example of a tenant that has been affected by an unfairly withheld deposit is Casey Vearncombe from Weston-super-Mare. She lost £1,340 when her landlords unfortunately went bankrupt and the house she and her partner rented was repossessed.

She’s been quoted explaining: “We spoke to the liquidators about our deposit, but they said the landlords owed so much money there was unlikely to be anything left in the pot for us. When we first rented the property, they mentioned the tenancy deposit protection scheme, and I even have a letter saying they were going to put the money away safely. We didn’t have any reason to think they hadn’t done that.”

The loss of cash ultimately meant Casey and her family, including her child, had to be re-homed by the local council.

She went on to add: “I was lucky because the council re-housed us, but financially it wrecked us. I still owe my mum the money she lent us for the deposit to move in.”

This is an alarming example of tenants running into trouble through no fault of their own. This coupled with the rise in complaints has forced Shelter to urge that all tenants visit their website in order to check whether their deposit has been protected correctly.

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