Martin & Co Call for a Single Tenant Deposit Scheme

BOURNEMOUTH, England - In the wake of a number of cases of end-of-tenancy disputes and even the fraudulent misappropriation of deposits held on some letting agencies’ client account, the Managing Director of the UK’s largest dedicated letting agency has hit out at the Government’s failure to go further in legislation covering the security of tenants deposits.

Ian Wilson, MD of Martin & Co, which has over 160 letting offices nationally, said that many landlords and, shockingly, letting agencies still hold deposit monies themselves without complying with the Tenancy Deposit Protection regulations.

The regulations, introduced two years ago, provides for two types of scheme - custodial, where the landlord or their agent pays the tenant’s deposit into a government-bonded account; and insurance-backed, where the landlord banks the money, with any potential loss only due to a dispute being covered by insurance.

However, both these options have major flaws in-so-far as the money is still handled by the landlord/agent directly, and can therefore be misappropriated, and the tenant may not know of their loss until they try to recoup their deposit at the end of the tenancy. Many tenants still remain unaware of the landlord’s obligation to provide written confirmation of the scheme being used.

For example, if a tenant does not receive written confirmation of the deposit protection scheme used along with a reference number within 14 days of payment, the tenant has the option to take action against the landlord for non-compliance. As a consequence the landlord can potentially lose the right to serve a Section 21 Notice to evict the tenant for non-payment; anti-social behaviour etc. without a court order, and the tenant may even stay on at the end of the tenancy in some circumstances. Additionally, the tenant also gains the right to demand payment from the landlord equivalent to three times the deposit amount, in addition to the refund of the original amount paid. Expensive!

“Be it deliberate negligence or unwitting ignorance, landlords or their agents who do not lodge deposits properly and adhere to the rules are not only jeopardising tenants’ money, but they are also exposing the landlord to harsh penalties which can devastate their return on investment,” said Wilson.

“This remains most unsatisfactory as there is still a huge opportunity for abuse. The obvious solution is to clarify the rules and streamline them into one, well publicised process via a single scheme - and ideally one where the tenant can lodge their monies directly into a custodial account without any monies passing through the hands of the landlord or letting agent (many of whom are simply represented by a desk in the corner of an estate agency branch). The tenant would of course be provided with a certificate at the time of lodgement.

“In this way, there would be no missing money, no confusion as to how the scheme operates, no mystery about where the money will be held, no threat of an Agent or Landlord going under and taking the deposit with him, no more court action for non-protection of monies, no hassle of late deposits, and no shady third party bank accounts. Indeed, the government’s original statement that tenants could sleep well at night knowing that their deposit monies are safe would then be accurate.

“At Martin & Co we are passionate about fairness, transparency and simplicity. Indeed, we are currently auditing all of our offices to ensure all landlords are aware of the regulations and that deposits are correctly held. As this weaker economy produces more rogues and business failures, we urge the Government to look quickly at the above solution to the current problem of tenant deposits.”

Notes to Editors: ABOUT Martin & Co:

- Established in Dorset by Chairman Richard Martin in 1986, Martin & Co (UK) Ltd became a franchised operation in 1995. The head office is based in Bournemouth. It is a recognised Investor in People, and a full member of the British Franchise Association.

- Martin & Co is the UK’s largest residential lettings agent with over 160 offices throughout the UK.

- Websites: www.propertyfranchise.co.uk / www.martinco.com

Contact:

For further information about Martin & Co nationally please contact Marketing Manager Jayne Codling +44(0)1202-405543 or email jayne.codling@martinco.com

Source: Martin & Co

Contact: For further information about Martin & Co nationally please contact Marketing Manager Jayne Codling +44(0)1202-405543 or email jayne.codling at martinco.com