Landlords unaware of Government-run Tenant Deposit Scheme

Disputes over damage, late payment of rent or unpaid bills are some of the most common gripes that lead to the breakdown in the landlord/tenant relationship.

According to research undertaken for Alliance & Leicester Mortgages, over half of all landlords (56%) keep some or all of their tenants’ deposit when they move out for a variety of reasons, leading to arguments and sometimes even legal action.

Top grievances that cause landlords to charge their tenants include:

Property damage (26%)
Missed rental payments (25%)
Cleaning costs (22%)
Furniture damage (21%)
Unpaid utility bills (15%)

Jeremy Claridge, Head of Specialist Mortgages at Alliance & Leicester comments: “Being a landlord means gaining not just an additional property, but all the responsibilities that come with tenants living there. Landlord/tenant disputes can unfortunately happen all too often. Agreeing on an inventory, taking photos before tenants move in or employing a letting agency can minimise the risk of any arguments.”

April saw the introduction of a new Tenant Deposit scheme set up by the Government to benefit both landlords and tenants for precisely these reasons. It is designed to protect the tenant’s deposit, as well as providing an impartial resolution process for those cases that have got out of hand. There is a legal obligation for all landlords in England and Wales to join one of the schemes nominated by the Government.

However, when questioned, over half (53%) of all landlords were unaware of the new scheme, and a further quarter (23%) were aware of it, but didn’t really understand what it meant for them. Just 24 per cent knew about the scheme and understood the details.

Despite it being a legal obligation for landlords to participate, a staggering six in ten (63%) landlords in the South East and Eastern England knew nothing about it – the most unaware in the UK. Landlords in Wales, however, scored top marks, with 59 per cent aware that this scheme was being introduced.

When questioned on whether they would be using one of the schemes, three in ten (29%) wanted to know more about it, but one in five (17%) were happy to hand the responsibility to their letting agency to make the decision on their behalf.

Jeremy Claridge continues: “The Tenant Deposit Scheme is designed to give both tenants and landlords peace of mind, and in the event of any dispute, all cases will be treated fairly. This should make both renting and letting a less stressful experience overall, and hopefully the landlord/tenant relationship should shake off the traditional image of warring partners.”