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New Legislation To Safeguard Tenants’ Deposits
Date Added 07/11/2006
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New legislation, designed to safeguard tenants deposit money and provide adjudication for deposit disputes, will come into force on 1 October this year.
Under the Housing Act 2004, in less than six months time, the use of a tenancy deposit scheme will be mandatory for all landlords. If a rented property falls within the provisions of the Housing Act - effectively, if the rental value is less than £25,000 a year - landlords and their agents will have to be members of a recognised Tenancy Deposit Scheme. Private Landlords will no longer be able to hold their own deposits, and they will either have to lodge them in a custodial scheme, or use a Lettings Agent who is a member of an approved Tenancy Deposit Scheme.
The system for Alternative Dispute Resolution will help do away with protracted argument and court procedures and remove unsolvable problems from the agent`s desk and put them where they belong, with an experienced, independent adjudicator.
The Tenancy Deposit Scheme came on-stream two years ago, with the backing of the professional bodies active in the private rented sector: ARLA, the Association of Residential Letting Agents, the NAEA, the National Association of Estate Agents and the RICS, the Royal Institution of Chartered Surveyors. It already has well in excess of 1,000 active letting offices in the scheme.
It is obvious therefore, that from the 1 October, a wise Landlord will wish to use the services of a member of those professional bodies, who is also a member of an approved Tenancy Deposit Scheme to ensure they comply with the law.
Another important requirement will be the preparation of a highly detailed Inventory and schedule of condition of the property and its contents. This will be essential evidence if a deposit dispute is referred to the Tenancy Deposit Scheme adjudicator, and again, a Landlord should seek to use the services of an agent who is able to provide such a detailed inventory, and keep it updated each time the tenancy changes.
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