The new policy will come into force from June 1st – making The Deposit Protection Service the only scheme to routinely inform tenants that their deposit may not be protected.
Currently, nearly 1500 deposits a month are registered with The DPS, with tenant details, move-in dates and deposit amounts all given – but no cash is handed over for protection.
The DPS says that the move will also help to protect landlords from letting agents entrusted with deposits who fail properly to protect them.
Under deposit protection legislation that came into effect in April 2007, landlords have 14 days to register deposits received from tenants with an approved Government protection scheme.
Schemes are not responsible for ensuring that landlords comply with the law, but The DPS knows that with the data it holds, it can play a vital role in exposing rogue landlords and agents:
Kevin Firth, director of The DPS, said: “The point of this measure is not to name and shame, but to help ensure landlords and agents are held to account for their responsibilities under the law.
“The DPS is already the safest option for tenants and landlords because we physically hold onto a deposit. Others insure it – which offers no certainty for tenants and leaves landlords vulnerable if a letting agent goes into administration.
“Now we will be giving an even greater level of protection to tenants, helping them to live in their home, happy and confident that their money has been properly protected.”
The DPS will write to landlords who have registered the tenancy but not paid the deposit after the legal requirement of two weeks; giving them a further week to pay over the cash. In the event that the money is not received, tenants will be told that their deposit may not be protected, potentially giving them grounds to take offending landlords to court. If found guilty, landlords face being fined up to three times the amount of the deposit.
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