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Over a third of landlords risk committing a civil offence

Almost one year on from its introduction, 40% of UK landlords are still unaware of the Tenancy Deposit Scheme leaving them at risk of committing a civil offence and being forced to pay tenants three times the deposit amount.

The Tenancy Deposit Scheme was introduced by the government on April 6 2007 to protect tenancy deposits and provide a fairer system for settling disputes about the return of a deposit at the end of a tenancy.

But nearly a year on, independent research commissioned by The Money Centre, one of the country’s largest independent buy-to-let mortgage brokers, has found that 40% of landlords questioned are still unaware of the scheme. A further
22% of respondents said they were aware but did not fully understand it, leaving only 38% confirming they were aware of the scheme and understood it.

The results show that awareness levels have plateaued since The Money Centre last reported findings on the TDS scheme in October 2007, leaving a large proportion of landlords still in the dark about the legislation. Awareness of the scheme has actually dipped slightly since October, with a 6% drop in the number of respondents who said they were aware of the scheme and fully understood it.

Lynsey Sweales, marketing and PR director of The Money Centre says: “The results of this research are extremely worrying. The scheme has now been in place for nearly a year, yet many landlords are still unaware of the
legislation and its implications. The good news is more than half of those surveyed did believe the scheme would benefit both landlords and tenants, as it was designed to do. But until awareness, understanding and participation can be improved the scheme won’t be fully effective.”

The Tenancy Deposit Scheme was introduced to ensure tenants get all or part of their deposit back, when they are entitled to it, any disputes between tenants and landlords are easier to resolve, and tenants are encouraged to look after the property they are renting.

Deposits are a big issue for many landlords with half of those surveyed confirming they had withheld all, or part of, a tenant’s deposit to cover property damage and other costs (such as cleaning costs and unpaid utility bills) at some stage. Therefore, it may not be long before problems arise due to a lack of participation in the scheme, and if a landlord or agent does not protect a tenant’s deposit, they can be ordered by the local county court to pay the tenant three times the amount of the deposit.

While the TDS only covers tenancy agreements made on or after 6th April 2007, as time goes on and tenancy agreements are renewed and changed, all landlords will eventually become affected. It is therefore vital that landlords take the time to understand the TDS now and avoid becoming ignorant of the law.

Sweales concludes: “Once again we are urging landlords who are not up to speed with the TDS to do their research immediately and advise them to join their local landlords’ association. These organisations provide advice to
their members on changes in legislation and can act as a forum to share best practice.”


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