Many landlords not aware of new Tenant Deposit scheme
Even though a new Tenant Deposit scheme was put into place by the UK government from 6 April 2007 to protect the deposits tenants pay when they rent a property, new research compiled for Alliance & Leicester Mortgages (LSE: AL) shows that only 24 percent of landlords both know about the existence of the scheme and understand its details. Fifty-three percent of landlords said they did not know about the new scheme at all, and 23 percent knew about it but did not understand how it works.
Regionally, 63 percent of landlords in the South East and in Eastern England knew nothing about the scheme, which is meant to protect both landlords and tenants in England and Wales from the disputes that can arise when a tenant does not receive all or part of their deposit back when they leave a property, even though all landlords are legally bound to use the new scheme. Landlords in Wales did better, with 59 percent saying that they were aware of the new scheme.
The Tenant Deposit scheme, which covers Assured Shorthold Tenancies – the vast bulk of all tenancies – in England and Wales, protects all deposits up to £25,000 and provides a resolution process when disputes arise over non-returns of deposits. The scheme was deemed necessary, as 56 percent of landlords retain some or all of the tenants’ deposits when they move out of a property to cover such issues as damage to the property, missed rental payments, cleaning costs, and unpaid utility bills. Disputes over such issues often lead to legal action, which the new scheme attempts to avoid.