Politicians Called On To Disband
Tenancy Deposit Schemes
The estate agent review site, All Agents, is calling on politicians to scrap insurance based tenancy deposit schemes claiming that such tenancy deposit protection schemes are misleading, as tenants and landlords may find themselves in the precarious position of believing that their deposits are securely protected.
All Agents says that: The unfortunate reality is that a letting agent could simply exit themselves from the scheme, which would negate the deposit protection insurance and potentially leave tenant deposits unprotected. Even worse, a letting agent could go out of business, meaning the likely loss of any tenant deposit funds that the letting agent may have held on behalf of their landlord clients.
It has already been reported in the British press and media that some unscrupulous property management firms have used tenant deposit money to assist with company cash flow, or as in some cases, to fund luxurious lifestyles.Whilst the changes in legislation have helped to provide additional security, regarding the safety of a tenant’s deposit money, there are further steps that can be enforced.
All Agents says the deposits paid by tenants, should not be subject to such jeopardy and as robust a system as possible should be in place to ensure the safety of the tenant’s deposited funds.
Michelle Hodge of All Agents said: “The custodial Tenancy Deposit Scheme (TDS), which is mandatory in Scotland, is the only way of truly safeguarding tenant deposit funds from any such dangers.”
This system also provides agents with the flexibility to move between scheme providers and allows landlords the flexibility of moving between agents, whilst protecting the deposit funds within the security of a third party bank account at all times.
Make sure your tenant’s deposit is properly protected, or as well as being financially out of pocket by having to refund the tenant’s money, you may well be prosecuted and fined for non compliance with current legislation requiring tenant deposit monies to be placed in one of the 3 active tenant deposit protection schemes; which are:
- TDS – Tenancy Deposit Scheme
- DPS – Deposit Protection Scheme
- My Deposits
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