| Friday, 23 March 2007 | |
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MP welcomes launch of National Tenancy Depsoit scheme Dartford MP, Dr Howard Stoate, has signed a parliamentary motion welcoming the forthcoming launch of the National Tenancy Deposit Scheme. The new scheme, which is to be launched on 6 April, has been set up to protect tenants in the private rented sector. Under the system all new deposits taken by the landlords of assured short-hold tenancies will have to be secured by law under one of three new protection schemes. One scheme will hold the deposits directly; the other two will provide insurance cover if a landlord defaults. The aim of the new scheme is to ensure that tenants can get their deposits back when they leave a property and to prevent unscrupulous landlords from withholding deposits without a valid reason. According to the housing charity Shelter, 75% of tenants who had their deposits withheld last year felt that they had been treated unfairly. Dr Stoate said; “This scheme will provide security and peace of mind to thousands of private sector tenants in this country. Unfortunately too many tenants in this country have lost part or all of their deposits in the past through no fault of their own. Not only is this extremely unfair but it can also cause considerable financial hardship and make it difficult for tenants to find new tenancies elsewhere.” Once the new scheme comes into effect, any dispute about how much of the deposit should be returned will be sorted out by either a dispute resolution service or the courts. There are other potential sanctions against rogue landlords as well. Should a landlord take the money but fail to use either of the three new deposit protection procedures, then as well as forfeiting the normal right to eviction, they could also be ordered to repay the money. The court could also order that the money be safeguarded by one of the new protection schemes. In addition, the court will levy a fine - of three times the deposit's value - which will then be paid to the tenant. Notes The average value of a deposit paid by tenants to cover missed rent, unpaid bill or damages is £695 in England. There are two types of scheme: a single custodial scheme (where deposits will be paid into and held in a separate account managed by the scheme); and one or more insurance-based schemes where the landlord or agent will hold the deposit and any failure on his/her part to repay it to the tenant will be covered by the scheme's insurance arrangements. The custodial scheme run by Computershare Investor Services will be free to use for tenants and landlords. The scheme will be funded by the surplus from interest generated on the pool of deposits, with interest also being paid to tenants. The two insurance-based schemes, run by The Dispute Service Ltd and the National Landlords Association, will be funded through a fee paid by landlords or agents (the fee level should be known in early 2007). The service will be free to tenants. All three schemes will offer alternative dispute resolution services which will be free to use (for both landlord and tenant). |
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© 2008 Dr Howard Stoate - Member of Parliament for Dartford
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