A specialist eviction and advice service, through their helpline calls, predicts that up to 38% of landlords who are trying to evict tenants are facing an uphill battle as they have not properly protected their tenants deposits. The correct procedure for deposit protection was introduced in the 2007 government backed scheme.
The company believes that because of the amount of calls for help with eviction this year alone, there are high numbers of amateur landlords and even some lettings agents who have not complied with or understood the legislation.
All landlords and or letting agents must place a tenant’s deposit in one of the government recognised protection schemes. The money must be deposited within one of the schemes within thirty days and the tenant has to have received the prescribed information. If this procedure is not adhered to, then landlords can expect to be given a penalty that is equal to three times the deposit, the money is then handed over to the tenant.
Landlords should also be aware that they will be penalised if their agent has not followed this procedure.
The Service founder said: “There are too many landlords that still do not know enough about being a landlord and their responsibilities. Many are failing to comply with deposit protection rules and this is having a knock-on effect when landlords wish to evict through Section 21. The simple fact is, ignorance will not solve the problem.”
Landlords must return the tenant’s deposit before they can proceed with obtaining a court order for possession. The Service reports back that there is worrying trend of more cases of tenants suing their landlords for not protecting their deposit.
- “It seems to me, that tenants are becoming savvier than landlords when it comes to buy to let legislation. Landlords, this is your business, you must be fully versed in your responsibilities,”.
The company’s legal team says that solicitors can be extremely reticent to represent these cases, as there is no real legal defence if the deposits have not been properly protected under the 2007 rules. The outcome of these cases is left solely to the judge’s discretion.
PIMS disagree with this comment the legal position [Judge directive] is VERY clear the 2011 Localism Act clearly states
no section 21 notice may be given in relation to the tenancy until such time as section 213(6)(a) is complied with.
(a) the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant, or (b) an application to a county court has been made under section 214(1) and has been determined by the court, withdrawn or settled by agreement between the parties.”
Eddie Hooker, CEO of a tenants deposit scheme, said: “The findings are somewhat worrying, especially as all three schemes have seen a healthy year on year increase in the number of deposits being protected. Having said that, we should not become complacent and there is clearly more work to be done in ensuring that deposit protection is embraced by the entire private rented sector.
“Landlords and agents should be aware that protecting the deposit with an authorised scheme is only one part of their legal responsibility. The other requirement is to correctly serve the prescribed information to the tenant and this is definitely an area where better understanding of the legislation is needed. The majority of legal cases we see surround the incorrect issuing of the prescribed information, or failing to issue it all. All schemes have extensive information on how to comply with the legislation, including timescales on their websites and we urge letting operators to ensure they understand their obligations.”