According to recent reports there are a number of landlords ignoring the [tag]Tenancy Deposit Scheme[/tag] (TDS). In figures released by the National Landlords Association (NLA) it is estimated that approximately 150,000 landlords have directly registered with an approved Tenancy Deposit Scheme. This means that there is a significant number who have not.
The legislation covering [tag]tenancy deposit protection[/tag] has been in place for nearly five months which means that there is a very large number of existing tenancies exempt from the legislation as it only covers tenancies created after April 2007.
The Tenancy Deposit Scheme is designed to protect deposits taken under an Assured Short-hold Tenancy (AST) agreement in England and Wales. There is a fear that in an attempt by some landlords to avoid regulation by letting their property under a different type of tenancy. This could prove to be a very risky strategy for landlords as it would make it very difficult for them to apply to the courts to recover possessions.
Another fear is that landlords may be choosing not to take deposits, thereby exposing themselves to even greater risk from tenants leaving without paying the final month’s rent. Let alone the risk of damage to property and possessions.
It would be a shame if in an attempt to avoid one small piece of legislation a landlord created more problems than simply registering with an approved Tenancy Deposit Scheme.
Whilst there could be a number of factors why so few landlords have registered with an approved scheme, there may be a minority of unscrupulous landlords who are deliberately flouting the law. Whether deliberate of done in ignorance, the penalties for breaking the law are severe.
In the event that the matter ends up in court, a non-complying landlord can be ordered to repay the deposit, plus a penalty of 3 times the amount. If a deposit has not been protected by an approved TDS then then the landlord will be unable to apply to the courts for fast-track possession under section 21 of the 1988 Housing Act.
Whilst some landlords my perceive the TDS as an unwelcome piece of red-tape, it should be remembered that failing to look after a tenants deposit under the Tenancy Deposit Scheme can create much more serious problems in the future.