Landlords fail to comply with tenancy deposit legislation

No deposit required for Get Living tenants

Landlords who fail to comply with legislation regarding the placement of tenant’s deposits in government-backed deposit schemes are putting their property investments at risk.

A deposit from a tenant is required by most landlords before a tenancy commences to provide a level of protection to the landlord in case a tenant should cause damage to the property, breach the terms of their tenancy agreement or fail to pay rent.

In England and Wales, any deposits received on assured shorthold tenancies must be protected by one of the three government-backed insurance or custodial deposit protection schemes operated by the Tenancy Deposit Scheme (TDS), Deposit Protection Service (DPS) and MyDeposits within 30 days of receipt.

The insured schemes permit landlords or letting agents to hold the deposit for the duration of the tenancy in return for paying a fee to the scheme.

The custodial schemes hold the deposit on behalf of the landlord or letting agent with no fee incurred.  Instead they are funded by the interest earned from the deposit pool.

Scotland and Northern Ireland have separate tenancy deposit protection schemes.

In Scotland, the approved schemes are; Letting Protection Service Scotland, Safedeposits Scotland and MyDeposits Scotland.

The Northern Ireland appointed schemes are; Deposit Scheme Northern Ireland, MyDeposits Northern Ireland and Letting Protection Service NI.

Danielle Cullan, managing director at, claims many landlords run the risk of heavy fines for not placing deposits in a government approved scheme despite it being a mandatory requirement since April 2007.

The Centre of Economics Business Research discovered £514m worth of deposits in England and Wales were not registered or placed in any of the three government-backed deposit schemes last year regardless of the risk of a penalty to the landlord for non compliance.

Jane Morris, managing director of commented; “While deposit protection schemes protect tenants, there is little or no policing to ensure landlords and agents are compliant”.

However, landlords should be warned that tenants can contact their local county court to check if their deposit has been placed with a government assured scheme and if a landlord is found guilty they can be ordered by the court to pay up to three times the deposit amount within 14 days.

Landlords should also be aware that they could face a penalty if their chosen letting agent fails to comply with the deposit regulations.

Full article available on LandlordTODAY:

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