Letting agent fees ban – Thank you for sharing your views

Last year, Chancellor Philip Hammond announced his intention to ban letting agents’ fees in England. With the ban expected to have a big impact on the industry, the Department for Communities and Local Government (DCLG) launched a consultation to gauge the views of the market. And unsurprisingly, it generated a huge response.  

To make sure letting agents, landlords and tenants voices were heard and to help the DCLG gain a broader picture of the market, we ran our own survey to collate the views of our customers.


Any ban should also include landlords

We received 3,286 responses, and although there were expected divisions between agents, landlords and tenants, it was encouraging to see suggestions that people on all sides of the market could agree on. 

Most of the people who took our survey agreed that any ban should apply to all agents and landlords equally, with data held on rogue landlords and agents shared across the industry to help improve standards. 

It’s expected that rents will increase because of the ban, and tenants are willing to accept the rise, if fair. But according to the responses, 86% of tenants were strongly in favour of capping holding deposits. 

Interestingly agents were fairly evenly split between yes (54%) and no (46%) when it came to charging for a premium service in certain sectors, such as relocations. Tenants on the other hand were comfortable with the charges, as long as they’re known up front and representative of the service given.

Also, most people felt that any measures that remove costs, or spread them over a longer a period of time, will help with the affordability of housing and increase mobility in the housing market. 


Lifting the negative perception of letting agents

One point that came through clearly was that many tenants have a negative view of letting agents. Most tenants (86%) felt that a ban, with strong, effective enforcement will help remove some of their concerns and make them more likely to use a professional agent, a point echoed by 70% of agents and landlords who support the introduction of stronger enforcement measures. 

Such a move would not only increase competition in the market, but also force those letting agents with lower standards out of the market – increasing the overall quality of industry service.


What’s next for the private rented sector? 

Implementing the ban is still on the government’s to-do list, but the information published earlier this year shows their commitment to delivering a total ban on fees that will include landlords and tenants. There was also a proposed cap on holding deposits at one week’s rent, and tenancy deposits at four weeks rent. 

Thank you for taking to the time to complete our survey. Your responses allowed us to present a detailed view of the market to the DCLG. We’ll make sure you to keep you updated as the story develops.

Average tenancy deposits in the UK hover just below £1000

Our latest tenancy deposit ratings are out now. Every three months we crunch the numbers and calculate the average tenancy deposit for 100 cities across England and Wales.

Our sums have revealed that the average tenancy deposit for England and Wales is £970.18 – continuing to hover just below the £1,000 mark.

While the rest of the country maintains a certain level of consistency, London postcodes set a new all-time peak, averaging £1,831.14, which is more than double the figure for the rest of England and Wales (£883.21 without London).
 
To give you a clearer picture of what’s going on in your region, we’ve compared the 100 cities to the national average. How does your city stack up? Click here to find out.

Our Managing Director, Julian Foster said: “…tenancy deposits can be demanding sums for tenants to raise when they move.

“However, both parties can have peace of mind over the money when it is protected with The DPS…” 

It’s clear that these are challenging times for the Private Rented Sector and whether you’re a landlord, tenant or letting agent we’ve got some helpful tips and advice to help you get the most from your tenancy.

How can landlords end an assured shorthold tenancy

Recently, there’s been some discussion in the lettings community about serving notice to end a tenancy, resulting in a range of responses with no clear view. To help landlords understand this complex issue, we’ve invited Tessa Shepperson from Landlord Law to explain how landlords can end tenancies. 

Please note: Comments regarding amendments arising from the Deregulation Act 2015 apply to tenancies in England only, not Wales.

How can landlords end an assured shorthold tenancy?

There’s generally a lot of confusion about the service of notices and whether they actually end a tenancy in the eyes of the law.

Before we explore this further, let’s take a look at the original form of notice that we used to use – a Notice to Quit.

Notices to Quit (NTQ)

An ‘NTQ’ is a special type of common law notice that will completely end a tenancy after the notice period. It’s not the same as, say, a section 21 (s21) notice, even though an s21 is a notice asking your tenant to leave!

People sometimes make the mistake of using the term NTQ to end their tenancies. Although NTQs are still used for common law and unregulated tenancies (such as company or resident-landlord lets), they’re invalid for the majority of residential tenancies.

Section 5 (s5) of the Housing Act 1988, which regulates assured tenancies (ATs) and assured shorthold tenancies (ASTs), states that landlords’ NTQs are of no effect, as:

> They can’t be used to end a fixed term early; and
> They can’t be used for ATs or ASTs!

If a landlord is able to use a NTQ (for example if they don’t have an assured or an assured shorthold tenancy), they’ll need to act quickly to issue proceedings to evict their tenant, as accepting another month’s rent from the tenant can resurrect the tenancy - meaning that they’ll have to serve another NTQ to end it again!

However, it’s worth bearing in mind that AT and AST tenants can still serve an NTQ - for example to end a periodic tenancy.

So, if an NTQ is useless for ending the vast majority of tenancies, what should landlords use instead?

Ending a tenancy under the Housing Act 1988 

The Housing Act 1988 governs most tenancies created since 15 January 1989. It put into place new rules about ending tenancies, set out in s5 of the act, and says that tenancies can only be ended in the following ways:

1. By a landlord getting a possession order from the Court AND the order being ‘executed’ – e.g. by a County Court bailiff physically removing the tenants - s5(1)(a); or

2. Where the tenancy agreement allows the landlord to end the tenancy - normally by exercising a ‘break clause’ - s5(1)(c)  (although it should be noted that if the tenant stays in occupation, a ‘periodic’ tenancy will then come into being, under section 5(2), meaning that the tenant will still have a tenancy.); or

3. By ‘a surrender or other action on the part of the tenant’ - s5(2)(b). This will normally be:

> Exercising a break clause;
> Moving out at the end of the fixed term;
> Serving a tenant’s NTQ during a periodic tenancy; or
> Surrender (which normally needs to be agreed with the landlord).

The Housing Act 1988 notices

There are two notices to be aware of here:

> Section 8 (s8) - landlords can use this when they want to base their claim on one of the grounds for possession set out in Schedule 2 of the Act.  The most common ground is ground 8, the mandatory rent arrears ground; and
> Section 21 – this is for when landlords want to use the ‘no fault’ ground for possession.

It’s clear from the legislation that serving these notices doesn’t actually end the tenancy in the same way as an NTQ.  They do, however, entitle the landlord to obtain an order for possession if they go to court.

The tenant can continue to live in the property and will be liable for the rent.  If the landlord doesn’t issue proceedings, the tenancy will continue indefinitely - unless the tenant leaves of their own free will.


What happens if the tenant leaves early?  

Does this ‘end’ the tenancy? This is an important point as the tenant is only liable for the rent while the tenancy exists.  

The legislation does not actually say anything on this point, and currently there is no guidance available from the courts.  Therefore, the requirement for the tenant to serve notice if they wish to end the tenancy remains. Whilst section 40 of the Deregulation Act 2015 adds a new section 21C to the 1988 act providing for landlords to refund any rent paid in advance where:

“as a result of the service of a notice under section 21, the tenancy is brought to an end before the end of a period of the tenancy”

This would appear to be limited to any overpayment received as a result of the landlord no longer being required to serve their notice to coincide with the rental due date, which may result in an overpayment of rent.

So far as s8 notices are concerned, information is limited to a point at the end of the prescribed form, which says:

“Your landlord cannot make you leave your home without an order for possession issued by a court. By issuing this notice, your landlord is informing you that he intends to seek such an order. If you are willing to give up possession without a court order, you should tell the person who signed this notice as soon as possible and say when you are prepared to leave.”

The important point to understand here, is that the tenant needs to inform the landlord if they wish to end the tenancy after the service of a notice. I do not think that the tenant can unilaterally end the tenancy by moving out after the service of a notice without doing this first.

To help illustrate the point, here are a couple of scenarios. Imagine a landlord has served an s8 notice on 23 May:

Scenario 1
The tenant just ups and leaves on 4 June, taking all his possessions and putting the keys through the letterbox. The landlord doesn’t find out until he visits the property on 23 June.

Scenario 2
The tenant tells the landlord that he will be moving out on 4 June. He moves all his property out on that day and gives the keys back to the landlord.

> In the first scenario, the tenant is liable for the rent up until the 23 June because they didn’t inform the landlord they’d be moving out on 4 June.
> In the second scenario, the tenancy ends on 4 June because the tenant let the landlord know. Therefore the tenant will not be liable for any further rent after that date.

In many cases where tenants leave in this way, the tenants liability for rent is academic as there won’t be any money available, other than by claiming against the deposit. However, it is always a good idea for tenants to minimise their liability to their landlords. 

To put it simply, tenants need to keep their landlords informed if they’re moving out and landlords need to keep a close eye on their properties.

Tessa Shepperson is a specialist landlord & tenant lawyer.  Find more of her writing on the Landlord Law Blog.

 

The ‘new’ model tenancy agreement

In February the Department for Communities and Local Government updated their ‘Model agreement for a shorthold tenancy’. The agreement is designed to strike a fair balance between the needs of the tenant and the landlord when entering a new tenancy. 

With property prices rising ever higher, getting on the housing ladder is becoming more difficult all the time. As a result, demand for rental properties with longer tenancies is expected to be higher than ever. 

A longer tenancy does have its advantages. A tenant can plan for the future, safe in the knowledge that they won’t be looking for a new place to live in three months. And landlords will have a steady rental income without the hassle of always looking for new tenants (and the hefty fees that often go with it). 

The agreement has a really useful step-by-step process that a landlord and tenant can go through before entering a new tenancy. If you’d like to know more, download the document here

We’re proud sponsors of Lettings Live and The Lettings Agency of the Year Awards 2016

Lettings Live and The Lettings Agency of the Year Awards are just around the corner (10 June 2016) and we’re delighted to be one of the official sponsors. The prestigious annual event is the highlight of many letting agents’ social calendars.  

Last year, we were delighted to win the Silver Award in the Supplier of the Year category. We’re in the running once again for the 2016 awards and we’d love to go one better and take home gold. 

We’d like to wish all our customers who’ve entered the awards the best of luck in their categories. 

Come see us at our stand during the live event

We’ll also be at the Lettings Live event during the day. Two of our business experts, Chris and David, will be on hand to share their knowledge and answer any questions you have about our service, or about tenancy deposit protection in general. 

If you’re attending the event, here’s why you should pop over and have a chat…

›    We’re experienced  - We’ve protected over 4.2 million deposits since 2007
›    We offer great service - Callers rate our Customer Service Team over 9/10
›    We’re fast - We repay deposits within 2 working days

If that’s not enough to tempt you, there’s also a prize draw – visit our stand for the chance for you to win an iPad mini. 

It promises to be a great day and we’re looking forward to meeting you all.  
 

David Hackett

David joined us in 2011, working in Customer Service and Dispute Resolution before recently moving to our Account Management Team as our Senior Account Manager. He’s responsible for ensuring his team continues to provide top service to our managed clients.

 

Chris Jackson

Chris is our Business Support Team Manager and has been a member of our team since 2010. He makes sure his team gives you the highest levels of customer service possible whilst providing the guidance and advice you need.

SAFEagent Awareness Week – we’re fully behind it

From the 6-10 June, letting agents and organisations from across the UK will come together in support of SAFEagent Awareness Week. SAFEagent was set up “by the industry, for the industry” to protect landlords’ and tenants’ money. As a company that is committed to protecting tenants’ deposits, we’re fully behind it.

Throughout the week, SAFEagent will highlight the importance of choosing a letting agent that is part of a Client Money Protection (CMP) Scheme. In an industry that’s estimated to be worth £2.7 billion, it’s vital that our customers’ deposits are safe. There are still too many cases where tenants are losing money to rogue agents. 

John Midgley, Chair of the SAFEagent Steering Group, says: 

“Choosing a letting agent without CMP in place is a massive risk for both landlords and tenants. Who can afford to lose thousands of pounds? We might finally be getting closer to mandatory CMP but we aren’t there yet. It is so important that consumers understand that they need to choose their agent wisely by asking if they are part of a CMP scheme before entering into a contract with them.”

While it’s not mandatory to protect client money in a CMP, it is now firmly on the Government’s agenda. It’s definitely a step in the right direction and one that is supported by many organisations in the housing industry, including us. 

We’d like to encourage all letting agents to become members of SAFEagent. The blue and black SAFEagent ‘mark’ gives tenants and landlords the peace of mind that their money is protected.

Updates in the Private Rented Sector

The Private Rented Sector has generated many talking points in 2015 and this will continue throughout 2016 and beyond.  New laws and proposals implemented by the Government look set to alter the way letting agents and landlords in the housing sector operate.

Right to rent checks roll out nationally

In 2015, the Government trialled a new immigration law that forces landlords to take responsibility for checking whether their prospective tenants are eligible to live in the UK.  The pilot was held in the West Midlands and though the results were inconclusive, the Government has decided to roll it out nationally.  

From the 1 February 2016, landlords across the country are required to have performed right to rent checks for any new tenancies starting after this date.  

The Home Office has provided guidance for landlords on how to administer right to rent checks, and the documents that prospective tenants must provide. These can be found on www.gov.uk.

Taxation changes

Along with changes to tax relief on wear and tear and on buy-to-let mortgages, the government is also looking to increase tax revenues by introducing a three percent Stamp Duty Land Tax surcharge on purchases of second homes. This includes buy-to-let residences, with exceptions proposed for investors buying multiple properties. 

The tax will be applied to all eligible second home purchases from 1 April 2016 and many commentators have said this could affect the PRS and home-buyers’ market, with some suggesting there will be a rush to buy property before the April deadline. Others expect the buy-to-let market to remain buoyant despite increased purchase costs. 

It’s not just about what’s being introduced by the Government, but what’s not  

Many people were shocked by the Government’s withdrawal of an amendment to the Housing Bill currently going through Parliament, which would’ve enforced mandatory Client Money Protection for letting agents.  

With many senior industry voices and letting agents calling for the change, it was disappointing that the amendment was removed. We believe along with others that this would have improved standards in the PRS.  

We were also disappointed to see the Government reject a proposal for rented properties to be fit for human habitation. Rogue landlords who disregard tenant safety have a negative impact on the reputation of the industry and most landlords and agents believe that more can be done to weed them out.  

Many of you responded to our survey about rogue landlords, allowing us to present a collective industry view to the Government consultation on the subject in late 2015. The Department of Communities and Local Government (DCLG) has now issued their response to the consultation, displaying strong support for the following measures:

> A blacklist of persistent rogue landlords and letting agents
> The introduction of Rent Repayment Orders
> Additional criteria in the fit and proper person test for licences
> The introduction of civil penalties
> New procedures for tackling abandonment
> An agreement for data held by deposit protection schemes to be made available to local authorities.

The government's response to the consultation discusses each of these proposals and the next steps they plan to take.  You can view the full response on the Government website, www.gov.uk.

A new contract, the same high standards

We’re delighted to announce that we’ve retained the government contract to continue operating our Custodial tenancy deposit protection scheme following a competitive tender.

Our Managing Director, Julian Foster, said: “I’m delighted that the government has again chosen to entrust us with this substantial responsibility.

“This contract reflects the smoothness, transparency, fairness and security with which we have run the scheme over the last eight years – as well as its huge popularity among landlords and letting agents.”

We’re the largest provider of tenancy deposit protection in the UK to date and have been the only operator of a Custodial scheme since our launch in April 2007. We’re thrilled that we have the opportunity to continue providing high quality services to the almost half a million landlords and letting agents we have registered with us, as well as over 2 million tenants who depend on us to keep their deposits safe.

The government invited prospective partners to submit tenders for the scheme in March this year, and as well as awarding us a licence to continue operating our existing Custodial scheme, have given licences to two other businesses to set up new Custodial schemes to run alongside our existing scheme and the three Insured deposit protection schemes.

With the rental sector expanding and evolving, we’ll continue to play a leading role within the industry, focusing on rapid deposit repayment; clear, regular communication with landlords and tenants; and the provision of the best support, whether online, over the phone or in person at events, exhibitions and workshops.

We look forward to building on our relationship with you in the future, and continuing to provide you with the same high standards of service you expect!

The DPS Team

Big changes for landlords and letting agents in Wales

As you may have read, The Housing (Wales) Act 2014 has been enacted by the Welsh Assembly to allow a greater level of control over the housing market. 

Some of the new legislation is due to launch in autumn this year, and from even the quickest of scan-reads, it’s clear to see that it will have a huge impact on landlords and agents.

The proposed changes include the creation of standardised ‘model’ tenancy contracts, but the biggest change will be the introduction of compulsory licensing for landlords and letting agents for both the letting and management of tenanted properties. 

The new licensing scheme will operate as ‘Rent Smart Wales’, with Cardiff County Council appointed to act as the primary registration authority.

What does this mean for agents?

Under the current proposal, to obtain a licence agents will be required to pass a ‘Fit and Proper Person’ (FPP) test, the details of which are still being agreed. Without a licence, agents will not be able to undertake any letting activity including collection of rent, viewings or management. The licence requirement will extend to ‘tenant find only’ agents, though online agents may be exempt from the legislation.

It’s unclear at this point as to which agency representatives will be required to pass the FPP. However, initial indications are that anyone owning 25% or more of the lettings company will have to pass it. This will become clear when the scheme rules are released.

What does this mean for landlords?

The proposed changes for landlord registration will require landlords to register and pay fees to gain a licence for every property they let. Licences are expected to last for five years, at which point they can be renewed upon payment of another fee. Charges have yet to be decided, though to keep fees down, it’s expected that registration will be a short online process, capturing information about both the landlord and the property.  

If a landlord does not obtain a licence to manage a property, they will be committing an offence - unless they appoint a licensed letting agent to manage it on their behalf. It will be an offence to appoint an unlicensed agent.

Developing a Code of Practice

Some additional conditions are being introduced for agents and landlords applying for a licence. Recently the Welsh Government consulted with Welsh industry about the development of a ‘Code of Practice’ which would need to be adopted and adhered to as a condition of having a licence. Failure to meet the conditions of the code could result in both the licence being revoked and a potentially unlimited fine.

If introduced, the code may also state that landlords and agents will have to undertake mandatory training, though it’s not yet clear what the training would cover.

Licensing is expected to commence in autumn this year. Enforcement is likely to start in late 2016 or early 2017, in order to allow agents and landlords time to comply with the law. The Welsh Government has now launched the Rent Smart Wales website, where agents and landlords will soon be able to find out more and apply for a letting and management licence.

More success for The DPS!

We’re delighted once again to have received the recognition of the lettings industry, this time in the Letting Agency of the Year Awards 2015.  We took the Silver Award in the Best Lettings Supplier category which covers all sectors supplying services to lettings agents.

The Lettings Agency of the Year Awards is an annual event, held in association with The Sunday Times & The Times and sponsored by Zoopla Property Group. The Best Supplier category covers all sectors which supply services to lettings agents. Award winners were decided following a rigorous and thorough judging process by a panel of 20 industry experts. They assessed all the submissions, before conducting an extensive review of the entrants which included over 150 hours of telephone interviews and independent mystery shopping exercises.

We’re determined to keep improving our business, so we really are proud to receive this kind of recognition from our industry.

Julian Foster, Managing Director of Computershare Business Services said “It's fantastic to win this award so soon after winning Best Supplier of Tenancy Deposit Protection at the ESTAS, and is an acknowledgement of the great service The DPS team deliver to our customers, especially as we were measured against such a high calibre field of suppliers to the lettings industry."

The award was presented by women’s marathon world record holder, Paula Radcliffe.  

“This really is a great achievement for us and to receive an award from such a sporting legend, who achieved so much in their career, was also a great moment” said Daren King, Head of Tenancy Deposit Protection.

 Pictured: Paula Radcliffe, presenting Julian Foster and Daren King of The DPS with the award

Pictured: Paula Radcliffe, presenting Julian Foster and Daren King of The DPS with the award

Beware of fraudsters targeting tenants

Con artists and fraudsters are constantly changing their tactics. This is why we continually monitor the use of our service, as from time to time tenants can sadly find themselves a target.

We’ve identified a new scam which is targeting tenants using websites such as spareroom.com.

Here’s how it works:

  • The fraudster advertises a fake property or room – often at quite a cheap rental rate to attract interest
  • To secure the rental, prospective tenants are told to make a deposit payment to The DPS using a set of bank account details that actually belong to the fraudster

How to spot the scam

First and foremost, we will never ask you to make a payment directly to us.

You should only ever make a deposit payment to the letting agency or landlord, and we advise that wherever possible you inspect the property/room in person before doing so. Always obtain a receipt.

In many scams, communication is conducted via email. Tell-tale signs will be bad spelling or grammar and overly informal language (e.g. “finish the deal”). They may also try to make you feel under pressure to do what they want, and will sometimes ask you to confirm information that they should already have.

Protecting your money

Fortunately fraudulent landlords and letting agents are a minority in our industry. The majority are genuine and treat their tenants fairly. For further peace of mind, it’s also worth checking if your landlord or agent is a member of an industry body such as the Residential Landlords Association (RLA), the National Landlords Scheme (NLA). the Association of Residential Letting Agents (ARLA), or the National Approved Letting Scheme (NALS). Membership of these schemes indicates that a letting agent/landlord is genuine and committed to improving standards in the private rented sector. If you’re dealing with a letting agent, you can also check if they operate a client money protection scheme. The Safe Agent mark is an industry accreditation that shows an agent uses client money protection, which can also give you additional reassurance about the organization or person you’re dealing with.

Staying safe online

Here’s a few other tips:

  • Keep your passwords secret
  • Where possible, use passwords that include numbers, capital letters, lower case letters and symbols to make them more secure
  • Don’t write passwords down or save them in your phone
  • Take a good look at emails before clicking on any link – if it looks fake, or the offer sounds too good to be true, then think twice

You can also watch our video on ‘phishing’ to help you learn more about staying safe from fraudsters using email as a way to gain your personal information.

If you’re still not sure if an email has come from us, please forward it to us here and we’ll let you know if it’s genuine.

Do you rent to students?

We recognise that business runs a little differently for agents who let to students, which means your needs are different too.
 
We know it's getting close to that time of year when students will be ending their studies and their tenancies, which means a busy period ahead for you. With all your deposit repayments occurring at once, you need a deposit protection provider who can take away the administrative burden.

We’ve created a helpful infographic with some tips and tools to help make the process as easy as 123. We hope you find it useful.

The DPS rules out membership and annual renewal fees for new Insured Scheme

We are pleased to announce the pricing structure for our new insurance based deposit protection scheme. Offering customers the easiest and cheapest option

  • Value for money - We will offer the industry’s cheapest published option for landlords and letting agents to protect their deposits.
  • Easy - The DPS insured scheme will not be charging membership or annual renewal fees to its customers, so no membership paperwork to contend with either!
  • Convenient - Letting Agents will be charged per deposit monthly by direct debit; the (ex vat) fee to protect each deposit will be just £9.50 (further discounts will be available for volume).
  • Landlords will be charged just £15.00 per deposit for deposits under £500 (inc vat), and only £22.20 per deposit for deposits over £500 (inc vat) on a pay-as-you-go basis.

We’re delighted to be able to provide our customers with the best value for money deposit protection options. Our goal is to deliver excellent service to the industry and offering the most cost effective insured scheme alongside our custodial option will ensure landlords and letting agents have the best choice of protection.

 

[caption id="attachment_1065" align="aligncenter" width="583" caption="*Prices correct at time of posting (click to enlarge)"][/caption]

A ‘one stop shop’ for deposit protection

We currently run the only custodial based deposit protection scheme in England and Wales and we are the first scheme to offer landlords and letting agents both protection options.

Following in the footsteps of The DPS custodial scheme, landlords and letting agents will be able to register with this service online as well as by phone; and manage both custodial and insured deposits via one easy, integrated online account. Our new insured scheme is due to launch on the 2nd April 2013 and we’re pleased to see landlords and letting agents are already registering in advance.

To find out more about The DPS (Insured and Custodial), please visit www.depositprotection.com or contact us direct at media@depositprotection.com

 

Congratulations to our survey prize draw winner!

We recently sent out a survey to our letting agents to ask for feedback on our service.  That feedback will help us to enhance our product offering and service delivery ensuring that we continue to provide a positive customer experience for all our members. Thank you so much for the 1,100 responses we received! We really appreciate your feedback.

The prize draw for an iPad Retina has been made – and congratulations go to Debbie Rayner of Freelancer Lets who was the winner!

Debbie spoke to us and told us “We are absolutely thrilled to have won the iPad, thank you so much DPS!

“As a new company we will find all sorts of uses for this fantastic prize including onsite inventory preparation which will save time and effort, and the ability to log into our cloud based letting system from wherever we might be. We have no doubt our new iPad will help us to improve our efficiency and the service we provide to our landlords and tenants alike.

“Aside from providing an excellent service for the protection of tenant deposits, through their choice of prize DPS have proven themselves to be completely in tune with the needs of landlords and letting agents. Thank you once again.”

Keep safe, stay safe, #fraudprevention

We are aware of emails using our name asking customers to transfer money via wire transfer – these emails are fake and they are not from The DPS. If you receive one of these emails please ignore and delete it. We will be working with the relevant authorities to investigate who is sending these emails.

 

We are also aware of emails using our name which asks recipients to click on a link in the email which takes them to a fake log in screen. To try and fool the user, this fake log in screen may also contain links to our real website. These emails are fake and should be ignored and deleted. If you are ever unsure of the authenticity of an email, please do not click on any links within the email, but instead open a new web browser and go directly to www.depositprotection.com.

We will never email you to ask you to transfer money, or to ask for confidential information such as your username, password or answers to security questions. If you receive an email asking for this information, do not click on any links in the email or agree to any of the email requests.

All legitimate transactions with The DPS are completed via our secure website www.depositprotection.com only. If you are unsure, please go direct to our website or call us on 0844 4727 000.

When completing a transaction at www.depositprotection.com you will see our secure website starting with https:// so you can rest assured our site is safe and protected.

We will be tweeting online safety hints and tips with the hashtag #fraudprevention – spread the word and pass this information on to your tenants to protect our industry from fraud.

 

Changes to tenancy deposit protection from 6th April 2012

The Localism Act achieved Royal Assent in December and the DCLG has now confirmed that changes to tenancy deposit protection, introduced by the Bill, will come into force on 6th April. Tenancies already in place on this date will have 30 days in which to comply with the new rules. Here’s a recap of the changes due to take effect as a result of The Localism Act:

30 days – not 14 – to protect deposits

From 6th April, landlords and letting agents have 30 days from receipt of deposit in which to protect it.

The re-wording and extension of this timeline also closes the loophole with regards to deposit protection deadlines that was highlighted by cases such as Universal Estates v Tiensia in 2010.

Now, if a deposit is not protected within 30 days, the tenant can take their landlord or letting agent to court – there is no other way to interpret this legislation.

Prescribed Information

The requirement for providing the Prescribed Information to the tenant will also be changed to within 30 days of receipt of the deposit.

Whilst we provide a template for Prescribed Information on our website, it is the landlord or letting agent’s responsibility to ensure it is issued at the correct times so it’s vital they review the Localism Act and understand when Prescribed Information should be issued.

No retrospective protection after the tenancy ends

If a tenant makes an application to the county court once the tenancy has ended, the landlord will no longer be able to retrospectively protect the deposit in order to comply with the Act. If the tenancy has ended, the only option is for the landlord to repay the deposit, or part thereof, to the tenant.

Revised sanctions for non protection

The changes give the courts discretion to award not less than the amount of the deposit and not more than three times that amount depending on the individual case. For example, a repeat offender may find themselves with a larger fine compared to a landlord who has simply forgotten to protect as  an administrative oversight.

Section 21 notices

Further clarity to Section 215 of the Housing Act highlights that a section 21 notice may not be given where a deposit has not been protected within the 30 day period. However, there are exceptions to this which you can view in The Localism Act.

For a comprehensive explanation of each change, read our blog from September 2011 – ‘Tenancy deposit protection amendments proposed by the Localism Bill’. You can also read the The Localism Act (section 184) and view the amendments against the Housing Act 2004 (sections 213 – 215 are relevant).

We’ve returned 1 million tenancy deposits!

On Tuesday we paid back our one millionth deposit to Yvonne Stenning, a tenant from South East England! It’s great to have hit the million milestone just before our 5th birthday on April 7th and to mark the occasion, we’ve sent a bottle of champagne to the tenant and letting agent.

When we called Yvonne to let her know she said: “It’s a lovely gesture particularly as it was such an easy process; The DPS did all the hard work!” 

Her letting agent Wendy Carman from Molica Franklin, was pleased too: "We protect all our deposits with The DPS and it was a big surprise to be called and offered a bottle of bubbly! I'm thrilled it was Yvonne's deposit, she’s a wonderful tenant."

Since 2007, when The DPS started, we have returned deposits worth over £750 million to tenants, landlords and letting agents.

As the only approved custodial tenancy deposit protection scheme in England and Wales, we’ve focused on honing our unique repayment system to ensure that deposits are repaid as fast as possible. As soon as we have agreement from both parties, we can repay deposits within 2 days so that tenants can quickly use their cash for future lettings, for instance.

We re-pay an average of 950 deposits a day to recipients across England and Wales and work really hard to make things as simple as possible for everyone involved. We’re aiming to launch in Scotland too in the very near future, so landlords and tenants there will be able to take advantage of the same tried and tested system.

We currently protect over 840,000 deposits worth £660 million on behalf of tenants, landlords and letting agents. Our operating company, Computershare, is awaiting approval to launch The Letting Protection Service Scotland (The LPS Scotland) – a service that will provide similar protection to tenants, landlords and letting agents in Scotland.

The experience we’ve gained during five years of protecting and repaying deposits in England and Wales is of huge benefit to the Scottish market and we’re spending a considerable amount of time in the region talking to landlords and agents who have to start making changes to the way they treat tenancy deposits.

Tenancy deposit protection legislation is expected in Scotland towards the end of April 2012. For more information, visit http://www.lettingprotectionscotland.com/.

ADR Insight: DIY SOS - tenants painted my living room bright pink!

As a general rule, responsibility for decorating a property lies with the landlord. However, we see a number of disputes each year where the parties agreed to the tenant redecorating but the precise details were not clearly defined. Landlords who find that their calm and tranquil magnolia property has been returned in fuchsia pink, turquoise blue or pillar box red can be understandably shocked at the changes to the property. Here are a few of the statements we often see in evidence and the potential flaws with each of them:

1    Landlord says: ‘I told them it was ok if they used a neutral colour’

[caption id="attachment_964" align="alignright" width="300" caption="'You said yes, as long as it's neutral...yellow is neutral isn't it?'"][/caption]

What is a neutral colour? Most would assume magnolia, cream or beige but the landlord’s definition may be very different to the tenant’s, so it is helpful to be clear about what constitutes a ‘neutral’ colour.

2    Landlord says: ‘I told them they could use whatever colours they liked as long as they repainted it all back to original colours at the end of the tenancy’

If the details of the decorating agreement are not clearly set out in writing, it is difficult for the landlord to prove that such a discussion took place. Therefore it is unlikely to result in the claim being awarded in the landlord’s favour.

3    Landlord says: ‘I didn’t give permission’ but tenant says: ‘I told them I was going to redecorate and they didn’t object’ or alternatively ‘the landlord has been round many times since I redecorated and said how lovely it looked’.

Again, the precise details of any permitted decoration needs to be clearly defined.  Depending on what is said in the Tenancy Agreement, the tenant’s argument is unlikely to be persuasive in this instance, particularly if the agreement requires written permission from the landlord.

4    Landlord says: ‘I gave tenant permission to redecorate but they botched it and it looks awful’.

You may wish to include a requirement in the Tenancy Agreement that if the tenant is going to redecorate, the landlord is entitled to inspect the results. If they’re not satisfied the tenant can be asked to do it again, or the landlord can complete the works at the tenant’s cost. Alternatively, the landlord could insist that the tenant uses a professional to decorate the property.

Often Tenancy Agreements will state that the tenant can redecorate if the landlord’s written permission is given. Our adjudicators often see letters from landlords which simply allow the tenant to redecorate without stating the specific parameters. It is helpful to fully define them, so for instance an agreement may be drafted to confirm:

›       What rooms are being decorated

›       What colours are being used – this could include reference to colour charts or even sample wallpaper

›       Who is doing the redecoration – the tenant, or a professional decorator

Either way you should have something in writing, which is dated and signed by both the tenant and the landlord, that sets out the rules for redecoration so that the details agreed at the time can be absolutely proven.

Whilst disputes over redecorating are most common, if there is any agreement for other works to be carried out to the property by the tenant, such as alterations to the garden or carpets, or if for example appliances are being replaced, it is always prudent to document these and ensure that the terms are agreed by both parties at the time.

Our ‘Guide to tenancy deposits, disputes and damages’ provides comprehensive information and advice about deposit disputes – you can download the guide from our website.

The DPS – a year in review

Undoubtedly the hottest topic on the property pages has been the rapid rise of the private rented sector. Monthly rental values soared and tenant population increased as the housing market struggled. Letting agent Haart released figures in December 2011 that showed a 10% increase in the number of people registering with them over the last 3 months – a trend they expect to continue this year.

Activity at The DPS over the last year has also increased in line with this report. Since April 2011, monthly registrations and deposit submissions have been higher than last year. Here are some of the highlights:

›  Nearly 1 million deposits repaid since scheme launch in 2007

›  825,000 deposits worth £644 million currently protected on behalf of 166 organisations, 280,000 landlords and letting agents.

›  191,000 enquiries through Emma, our online virtual agent

›  69,000 text message reminders sent

›  50,000 deposit submissions in September – always a peak month but this was 4,000 more than 2010.

›  6,000 new landlords in August - 500 more than in 2010

›  600 adjudications completed in November – twice as many as last year but you’d expect this rise as the scheme matures

›  450 new letting agents in October

The DPS has the infrastructure and capability to easily deal with any rise in registrations, submissions, repayments and adjudications. With a new look website launched late last year and several new features that make deposit protection even easier for those landlords and tenants who are new to deposit protection, we’re more than ready to cope with further increases expected in 2012.

A landlord’s work is never done…

Landlords and letting agents never rest, particularly when there is so much demand on rental property and it seems several didn’t even take a break over Christmas and New Year.

›  We registered 5 new landlords on Christmas Day and a further 59 on New Year’s Eve.

›  15 deposits were submitted on Christmas Day and another 187 on New Year’s Eve

›  The latest deposit submitted on Christmas Day was at 23:09. On New Year’s eve, the last deposit was registered just in   time for fireworks and champagne at 23:41!

The year ahead…

We’re all very excited about taking deposit protection to Scotland this year and are currently awaiting approval from the Scottish Government to launch The LPS Scotland. We’re expecting this to be in April this year, so if you have rental properties in Scotland, get familiar with the requirements on the website and blog.

On behalf of everyone at The DPS, I wish you all the best for 2012.

ADR Insight – don’t neglect your rental property over the Christmas period

As you know, you can never fully switch off from your responsibilities as a landlord, whether that be taking on new tenants, completing deposit disputes or making sure your property is kept in good condition over the festive period. There are a couple of things you can do to make sure your properties are in order, ensuring the safety of your tenants and hopefully a stress-free Christmas for you.

Are your tenants leaving the property over Christmas?

Our adjudication team received a lot of claims earlier this year following the severe winter weather in 2010. The majority were the result of burst or frozen pipes at student houses where tenants had left the property to spend Christmas with their families.

In the worst cases seen by our adjudicators over the years burst pipes have resulted in damage to carpets and flooring, kitchen appliances needing replacing and claims for lost rent whilst damage is repaired. Some landlords have faced repair bills of several thousand pounds.

To avoid this stress and expense, you should contact your tenants if they’re going away to ensure that the proper measures are taken to avoid this kind of damage.

The AIIC has issued some guidance on keeping your properties safe during cold spells:

›   Insulation – Ensure water pipes and tanks are lagged and insulated.

›   Heating – Advise tenants to keep the heating on, at a min. of 15 degrees, if they’re going away. It’s also sensible to open the loft hatch allowing air to circulate and prevent pipes freezing and bursting in the loft.

›   Boiler servicing – Ensure that gas and oil boilers are serviced every 12 months.

›   If the property is going to be empty for an extended period it’s sensible to have the heating/water system drained by a qualified contractor.

›   Chimneys – Ensure they are swept once a year by a professional chimney sweep, ideally before the tenant starts using the fire.

›   Smoke Alarms – Check that smoke alarms are fitted in all properties and that they are all working properly. Replace batteries as necessary.

Be aware of evidence submission deadlines

If you’ve currently got a deposit in dispute then don’t forget to stick to your evidence submission deadlines. The DPS is not extending any deadlines but is making allowances for bank holidays so if you’re concerned about a deadline then get in touch so we can see what we can do for you.

Our Christmas opening hours

If you’re taking on new tenants over Christmas or the New Year you can submit deposits at any time online. If you need assistance our contact centre opening hours are:

Friday 23rd - 8:30am – 4:00pm

Monday 26th - CLOSED 

Tuesday 27th - CLOSED 

Wednesday 28th – 8:30am – 5:30pm

Thursday 29th – 8:30am – 5:30pm

Friday 30th - 8:30am – 5:00pm

Monday 2nd - CLOSED

You can also get in touch via online form or why not ask Emma, our online customer service agent.

Finally, a very merry Christmas to you from everyone at The DPS!