The DPS shows 10% growth as rates stay low

We’ve seen a marked increase in landlords and letting agents registering with us over the last three months. The largest increase in landlord and letting agent registrations came in May, with an 11 per cent increase over the same period in 2010. June and July also saw increases of 10 and 8 per cent in registrations over last year respectively.

There are now 22,000 letting agents and 250,000 landlords registered with our scheme which safeguards 760,000 tenants’ deposits worth £590 million.

It’s not surprising that there’s been a considerable increase in registrations over the last few months. With bank rates likely to remain low for the foreseeable future even landlords and agents with very large property portfolios are turning to us for free deposit protection rather than pay the fees charged by the insurance schemes.

This is also representative of the growing number of landlords forced to rent their properties rather than sell them, often to tenants who have been priced out of the buyers’ market.

The increased demand for rental properties means higher rents and larger deposits. It’s therefore more important than ever to ensure that landlords are protecting deposits as there is so much more at stake.

The increase in registrations is also testament to how easy it is to use our service. It takes a matter of seconds to create an account online and only a few minutes to submit a deposit – which is ideal for new landlords who have fallen into the role by circumstance.

If you'd like more information about The DPS, visit our website.

ADR Insight: A cautionary tale for landlords overseas

We’ve seen claims recently from overseas landlords who’ve fallen foul of the provisions of Section 48 Landlord and Tenant Act 1987 which requires landlords living overseas to provide an ‘address for service’ to the tenant. This address must be in England or Wales and we often find it’s the address of their estate agent, or possibly a friend or family member who looks after the property when they’re abroad.

Unfortunately some landlords don’t comply with this but they need to beware – the consequences for failing to comply with this provision are severe. The Act states that until the landlord provides a valid ‘address for service’, no rent is lawfully due from the tenant and we have seen claims where landlords find themselves vastly out of pocket, simply because they didn’t add this to the tenancy agreement.

We’ve also seen landlords give the address of the property itself as the ‘address for service’. Whilst this appears to comply with Section 48 requirements, it’s not wholly practical. For example, in the past we’ve dealt with claims for damage where the tenant’s defence was that it occurred as a result of a problem with the property (such as a leak or flood). They’d notified the landlord of the need for repair by sending a letter to the ‘address for service’ – here you see the flaw – which turned out to be their own home!

In these instances, there was no provision in the tenancy agreement that required the tenant to forward the landlord’s mail on to them, so the claims for damage failed – the tenants had done everything they were contractually required to do. 

So, whilst the property address would seem to fit the bill, think about how it would work in practice. If the tenant is going to vacate, as a landlord you need to receive notice of that. If all that the contract requires the tenant to do is equivalent to leaving their vacation notice sat on their own kitchen table for a month, it’s not much use to an overseas landlord who will remain blissfully unaware that their tenants are packing up and moving out!

ADR Insight: ‘Rogue’ landlords – fact or media fiction?

Lately, there’s been a strong media focus on so-called ‘rogue landlords’ but is it always so one-sided? Our adjudicators tell us that they do on occasion see some quite shocking behaviour – by both landlords and tenants. Here’s some real-life examples of unreasonable landlord claims, recounted by those deciding cases on behalf of the DPS: 

  • One landlord claimed for loss of rent for the remainder of the fixed term of the tenancy. On the face of it this seems quite reasonable until you read the ‘notice’ they served on their tenants by email, giving them 24 hours to vacate the property. They did as they were told, but the landlord then insisted that they should still be liable to pay rent for the remainder of the fixed term.
  • Another landlord who, having received notice from their tenant, allowed a new tenant to move into the property a week or so before the outgoing tenant was due to vacate therefore denying the outgoing tenant the right of exclusive occupation of the property. 
  • And another landlord claimed a sum in excess of £3,500 for ‘late payment reminders’ when rent was paid a few days late on two occasions. Whilst it is of course accepted that there is a contractual obligation to pay rent on time, the landlord provided no evidence as to the extent of loss he suffered, or the number of reminders he had sent to get the rent paid. The landlord may well have been entitled to some reasonable compensation, but it is hard to see how a sum of over £3,500 for two slightly late payments can be justified.

They’ve also seen equally unreasonable behaviour by tenants, such as: 

  • One who left a huge amount of rubbish in the shed for their landlord to clear out; this included the decomposing body of the tenant’s cat
  • Another who rented a property and erected a completely unauthorised two-storey ‘home office’ extension to the garden shed
  • And a tenant who decided to ‘decorate’ their lounge without the landlord’s permission, using silver foil over the walls. From the photos supplied by the landlord, it looked like a dodgy 1970’s Dr Who set!

These issues could easily have been avoided if the parties had carefully read and understood the full extent of their obligations under the agreement. We’re often surprised at the number of people (tenants in particular) who tell us they didn’t keep a copy of their tenancy agreement. It’s absolutely vital for both parties to have a copy of this document available at all times for reference purposes. A quick check of the terms of the contract could easily avoid a number of the disputes which come to us for decision.

The above are examples of previous cases. Each ADR case is assessed independently by our adjudicators on the basis of the evidence presented to support the claim.

How can landlords improve their chances in a dispute? Guest blog by Pat Barber, AIIC

The DPS recently released figures showing that only 18 per cent of disputes over tenant’s deposits are won by landlords. This statistic could be vastly improved if landlords better protected themselves at the start, during and at the end of a tenancy agreement. For starters, some landlords are failing to put a letting contract in place, or they have very unfair clauses in the contact. Other landlords don’t conduct an adequate check-in and check-out, or don’t keep copies of correspondence with the tenant which could be evidence in a dispute.

It is so important for landlords to ensure they get all the paperwork right at the start and at the end of a new tenancy agreement. Over and over again, we see landlords losing disputes because they can’t provide the right evidence to show that a tenant has damaged the property.

Aside from ensuring there is a fair contract in place at the start of a tenancy agreement, landlords should have a thorough and detailed inventory which will enable both parties to be treated fairly and reasonably. By opening a dialogue and using an independent inventory clerk, disputes can be resolved quicker and without the hassle that is often experienced at the end of a tenancy period.

The AIIC has outlined some guidelines below to help landlords improve their chances in a potential dispute:

-   For new tenancies, landlords should ensure that the property starts the let in a clean and tidy condition. A tatty property will not magically improve by the end of a tenancy and landlords can’t charge their tenants for 'betterment'. Gardens - if your garden is hideously overgrown at the start, don’t expect any improvement on the day of check-out and don’t expect the tenants to put things right for you at their own expense.

-   Always address maintenance issues as soon as they are reported. We come across many cases of minor issues that have become major problems - which the tenant can prove were reported during their tenancy and which the landlord has not bothered to do anything about. This results in a property deteriorating, which in both the long and short term will affect re-letting capabilities and rent achieved.

-   Always have a properly compiled inventory. This will always be much more detailed than a landlord’s own document and will provide vital evidence in any end of tenancy dispute. Your tenants should check and sign their agreement detailing the inventory when they check-in.

-   End of the tenancy - always encourage your tenant to be present during the check out inspection. It is important that they are aware of any problems and chargeable issues to their deposit. This will avoid nasty disputes. Using a deposit scheme dispute service should always be a last resort. The landlord should make every effort to communicate and negotiate with their tenant.

-   Check-outs - use an independent inventory clerk as they will have the knowledge and experience to make sure this process runs smoothly. They can make sensible judgements on normal wear and tear, items that are the tenant's responsibility and landlord's maintenance issues.

-   Photography - detail is vital and fine detail is even better! Take dated photographs of the garden; interior of the shed or garage; inside of the oven; and keys handed over to tenants - these are the main areas of problems that occur and are often down to misinterpretation at the end of a tenancy. Remember, you don’t need photos of every single corner of the property, these are frankly a waste of time and effort (and would be impossible to do) - stick to the important things. Don’t try to produce a completely photographic or filmed inventory without a complete written accompanying inventory. Films and photographs alone will be of little use in a dispute when an adjudicator is trying to find hard evidence of a particular area.  You can bet the problem in question just won’t be something you have photographed in the first place!

-   Make sure your property is fit for letting - on check-in day, the place should be completely clean and any garden areas should be tidy, lawns cut, borders weeded etc. If you don't start correctly, then things definitely won’t improve by check-out day/end of tenancy and you'll end up with a very tatty property, which won’t be let easily. Tenants cannot be charged for improvements - for making good/cleaning things that were wrong at the start and are still wrong at the end of the tenancy.

-   Have a full check-in - where you or the inventory clerk check through every line of the inventory. Add any amendments needed and then ensure that the tenant signs the agreement. When moving out day comes, try to make sure that the tenant is present at the check-out and make sure all the problems are explained - nasty surprises later will cause certain disputes.

-   Always try to keep good communication ongoing with your tenants and encourage them to report any problems as and when they occur during the tenancy. This ensures that your property will stay in as good a condition as possible and will avoid problems at the end of the tenancy.

Pat Barber is Chair of the Association of Independent Inventory Clerks (AIIC). The AIIC is a not for profit membership organisation and is committed to excellence and professionalism in the property inventory process. The AIIC works hard to ensure that all landlords, tenants and letting agents understand the importance and benefits of professionally completed property inventories.

These opinions are those of the writer and not necessarily those of The Deposit Protection Service.

Britons want to live with Cheryl Cole!

Despite keeping a low profile recently, Cheryl Cole has topped our latest survey in which we asked 1000 tenants who their ideal celebrity roommate is. 8% of tenants asked wanted to share a pad with Cheryl who pipped Johnny Depp (4%), David Beckham (3%) and Lady Gaga (3%) to the post.

The results have made for interesting reading. The usual suspects are all there of course, but there are also some more bizarre choices like Johnny Vegas and Robocop!

Singers and bands were the nation’s most sought after companions with nearly a third of you wishing you could share washing up duties with the likes of Robbie Williams, Katy Perry and Snoop Dogg.

The savviest tenants wanted those who would be best around the house, like Kim and Aggie to run the duster round and Jamie Oliver to whip up some tasty meals.

There were some much loved TV and film characters in the running as well, including Eastenders’ Dot Cotton, action stars James Bond and Mr T and funny-man Keith Lemon.

There’s a serious message here too: how well do you know the people you’re moving in with? Even if you think you know your fellow roommates, living with them may be very different. You’ll be responsible for paying a deposit which you’ll only get back by complying with your signed tenancy agreement and leaving the property in the same state it was when you moved in (subject to usual wear and tear) – so the return of your money depends on the reliability of others. 

If you don’t know who you’re moving in with, get to know them a little beforehand; the people you live with can be more important than the property and you wouldn’t rent a place without going to see it first.”

It’s vital for landlords to know their prospective tenants too. I’ve read several stories lately about a growing trend for rent arrears and the impact it’s having on landlords. Cheryl Cole is unlikely to have any trouble affording rent but make sure you undertake the necessary financial checks so you can be confident your prospective tenant(s) can afford the payments.

For a list of the top ten celebs and top 5 celeb categories, click here.

There’s now even more to Ask Emma!

I blogged a few months ago about how we had streamlined our customer support services by launching a new ‘Help’ page on the website and the work to enhance those services hasn’t stopped there. Emma, our online virtual agent has now had over 62,000 enquiries and since launch we’ve continued to monitor and develop the information she has at her fingertips so that she can answer all your questions effectively.

Prompted by a few recent enquiries and some of your suggestions, we’ve put some more information at her disposal so she’s now better equipped to answer your questions on:

›       Lost Deposit IDs

›       Registration problems

›       Methods of contacting us

›       Payment referencing

›       Overseas landlords

We’ll continue to update Emma and our other support services with the latest information but we’d like to hear from you too – perhaps there’s an issue that Emma couldn’t help you with? Leave us a comment if you have any feedback for her.

Some advice for choosing a student house - by Ben Whittaker, NUS Vice-President (Welfare)

Horror stories abound of the rat-infested, mouldy, poorly-secured flats and houses encountered by moving out of halls and into private-rented accommodation and of landlords who are either intrusive or negligent or both. The truth is these horror stories represent a tiny proportion of student accommodation but there are still things you can do to limit the chances of ending up in a nightmare and more mundanely, making sure you get what you expect. Your first port of call when you start looking for a new place to live should be your university accommodation office and your students’ union. They’ll be able to give you plenty of advice about what’s available in your area and may be able to point you towards reputable lettings agents or landlords.

Many landlords and lettings agents are accredited and have signed up to a code of conduct that gives you some security as far as what you’re likely to get in terms of accommodation and service. For more information about accreditation look to the Accreditation Network UK, the National Approved Letting Scheme and the Association of Residential Letting Agents. Many student properties (in England and Wales) are counted as ‘licensable HMOs’ – rented properties of five or more people and three or more floors – and these must be properly licensed and meet certain standards, giving you another layer of protection.

When you’ve found some properties you’re interested in there are a number of things it is important to consider relating to the internal and external condition of the property, the suitability of the accommodation, security, your prospective landlord and your contract. The National Union of Students (NUS) have put together a House-Hunting Checklist of some of these considerations and we’d recommend taking one to every viewing. Whatever you do, don’t panic the first time you see a half-decent place and lay down a deposit straight away. Make sure you view at least three properties and take photos if you can so that when you come to make a decision later they can jog your memory.

Take your time and get all the information and you’ll avoid being caught in one of the student digs horror stories. For more information you can visit the NUS housing pages - the NUS website contains advice on all sorts of aspects of student life.

These opinions are those of the writer and not necessarily those of The Deposit Protection Service.

Bogus calls from people claiming to be from The DPS

I wanted to warn you about a bogus phone call that one of our tenants received this week. The tenant in question had been contacted by someone claiming to be from The DPS. The caller told the tenant that he owed The DPS money, and asked that it be paid in to a specific bank account.

Under no circumstances does The DPS ever make phone calls saying that tenants, landlords or letting agents owe us money. Please report any calls like this to your local police authority.

An Adjudicator’s Perspective: discussions arising from recent claims

Our adjudicators deal with thousands of disputes a year – they’ve settled over 9,000 since we launched 4 years ago – so they’ve heard everything, from the reasonable to the ridiculous. There are some particular cases that have sparked interesting discussions recently which I wanted to share with you:

1.    How many pounds does it take to change a light bulb?

Light bulbs; not something you’d think could cause much trouble but we’ve had several cases lately where instead of simply claiming the cost to supply a bulb, our adjudicators have seen some rather expensive claims including:

- £40 for a contractor to fit 3 spotlight bulbs

- £30 for a contractor to fit 2 ceiling bulbs

- £28 for a contractor to replace 1 bulb in a cooker hood

Did these jobs really require a contractor, or could the landlord simply have claimed for the cost to supply replacements?

2.    How clean is your house?

Is there a difference between a property that is ‘domestically clean’ and ‘professionally clean’?

We’ve had cases in which independent inventory clerks have recorded a property as ‘domestically clean’ but the landlord has made a claim for a ‘professional clean’ even though there is no record in the inventory to suggest that the property needed further or deeper cleaning.

It would seem that if a tenant cleans their rental property on vacating it is recorded by inventory clerks as ‘domestically clean’. However, if the landlord pays a cleaner to clean the property to exactly the same standards – and that cleaner can provide a formal invoice – the inventory clerk will record the property as ‘professionally clean’.

However, the level of cleaning is no different and the inventory clerk is happy with the state of the property so what level of cleanliness must you go to in order to achieve a ‘professional clean’?

Ask yourself – is this reasonable?

The tenancy agreement is likely to place responsibility for replacing light bulbs with the tenant but if they don’t, is a contractor really required to complete the work?

It may be necessary in certain properties – those with high ceilings for example - but often it’s more appropriate for landlords to simply claim the cost of the replacement bulbs. If a landlord sends in a claim for a high contractor fee, it’s likely that they will need to provide evidence or explanation as to why the contractor was needed.

In the case of the level of cleaning required, the tenant can only be expected to return the property to the same level of cleanliness as when they moved in. Therefore, if the cost of professional cleaning is claimed, it’s likely that you’ll need to provide evidence of a similar professional clean being carried out before the tenant moved in.

There’s a specific section in the recently published Guide to Tenancy Deposits, Disputes and Damages that looks at cleaning charges - you’ll find it on page 9.

Tenants should make sure they understand and are happy with each clause in the tenancy agreement before signing it and landlords should ensure they’re not making unreasonable claims or risk disappointment when they are rejected.

For more advice on tenancy deposits, disputes and damages, download our recently published guide.

An industry first: dispute resolution guidelines released by the three TDP schemes

I’m pleased to announce that we’ve jointly published a 'Guide to Tenancy Deposits, Disputes and Damages' with the other two deposit protection schemes (my|deposits and TDS)

The new guide outlines the principles on which all three scheme administrator’s adjudicators make decisions so that the process is consistent and transparent for letting agent, landlord and tenant alike; regardless of which scheme you use.

Since 2007, around 47,000 disputes have been settled by our collective alternative dispute resolution processes and whilst we’ve always worked to the same principles, by pooling information on disputes and their eventual outcomes we’ve been able to identify common issues and work together to publish guidelines which cover:

›      How to avoid disputes in the first place

›      How to collate  evidence, and the types of evidence accepted by adjudicators

›      What an adjudicator looks for when considering a dispute

›      How to deal with common problems such as wear and tear.

This is the first time we’ve worked together to publish educational information that’s aimed at landlords, agents and tenants alike and it’s great to have had such positive feedback already.

You can get hold of a copy for free – download it from our website now – and understand for yourself how disputes are adjudicated, potentially helping you avoid these situations in the future.

Click here to download the guide.

Don’t forget important deadlines over the bank holiday period!

With the two bank holiday weekends fast approaching, it is important to stay on top of any deadlines that may occur over this period, particularly if you’ve got a deposit going through ADR or the Single Claim process. Please note that deadlines in respect of the Single Claim process are governed by legislation and cannot be extended.

However, if you think you may experience problems with meeting your ADR deadline, email and let us know. Please remember to contact us before your deadline expires, not afterwards!

Our office will be closed over the bank holiday periods but you will still be able to contact us via email which we’ll respond to during normal office hours.

Two million tenants protected by The DPS

We’re heading into our fifth year of operation and since we launched back in April 2007 we’ve safeguarded the deposits of more than 2 million tenants! Since launch, we’ve protected deposits totalling £1.1 billion on behalf of 20,000 letting agents and 250,000 landlords and currently we’re protecting 720,000 deposits worth £550 million.

It’s great to see so many tenants, landlords and agents in England, Wales and even Scotland choosing to safeguard their tenant’s deposits with us; it’s particularly pleasing as we didn’t have an existing member base when we started up in 2007.

As the scheme has grown we’ve concentrated on enhancing our service to make deposit protection as easy as possible. We’ve introduced more online functionality, a facility for tenants to check whether their deposits have been protected, SMS reminders and, most recently, our online service agent ‘Emma’ who’s been working hard with over 15,000 requests since launch.

In order to keep you up to date with all the changes and make sure you know what’s required of you, over the last year we’ve:

›       Sent 85,000 text messages reminding tenants to reclaim deposits

›       Sent 400 Tweets

›       Written 50 blog posts

›       Held 4 ADR workshops for landlords and letting agents

›       Recorded 1 podcast with Landlord Law

It’s vital to keep awareness up, particularly at the moment when we’re in the midst of a private rental sector boom and more home owners are finding themselves thrust into the role of reluctant landlord and even more people are forced to rent as they’re priced out of the market.

We’re still registering around 200 new landlords a day though, so I’m confident the message is hitting home.

Automated replacement repayment IDs are here

You can now request a replacement repayment ID over the phone and have it emailed or posted to you instantly, without needing to talk to one of our agents. 23% of enquiries we receive are for replacement repayment IDs, so to speed up the process and reduce your call times, we’ve updated our Interactive Voice Response (IVR) system, adding an option to request a replacement repayment ID.

The new service went live last night so now, if you call 0844 4727 000, you can select the first option to request a reminder 24 hours a day, 7 days a week – so no need to wait for your laptop to load up or until you can speak to an advisor.

In order to validate your request over the phone you’ll need to enter either your deposit ID and the deposit amount or your registered phone number, so make sure you have these to hand before calling; once validated, the reminder will be sent to you instantly via email or post, depending on the details held on your account.

This service will soon be available via SMS messaging – I’ll keep you posted.

Emma proves very popular

Our new online service agent, Emma, has been busy since she launched a little under 3 weeks ago. Emma has already received over 13,500 requests for help from our customers.

The most frequently asked questions are:

›       I want a repayment ID (10%)

›       How do I reclaim my deposit (8%)

›       How do I access my online account (6%)

We’re constantly monitoring these requests to gauge whether the information available is meeting our customers’ needs and we’re continually enhancing the service to ensure all enquiries can be answered.

If you have a question about The DPS, why not Ask Emma today?

The Single Claim process – when should it be used?

Since launching our online Statutory Declaration request facility, we’ve seen a sharp increase in the number of Single Claim requests. It appears that some landlords, letting agents and tenants are incorrectly using this as the default option to request repayment at the end of a tenancy.  There are only 2 reasons for using the Single Claim process at the end of a tenancy:

›       One party has no means of contacting the other party; or

›       One party fails to respond to the other party’s communication asking whether they accept their claim.

Other than that, where both parties agree on the deposit repayment, they should always start the Joint Deposit Repayment process. The single claim shouldn’t be used just because there’s a disagreement over the amount to be returned to each party – in this instance they should either agree to use the ADR Service or go to Court. 

If you’re following the Single Claim process for one of the reasons above, make sure it’s completed correctly. We have recently seen a 3% increase in the number of Declarations being rejected because of either:

›       A misunderstanding of the circumstances in which the Single Claim process can be followed; or

›       Inaccurate completion of the Statutory Declaration.

In order to help clarify the correct use of the single clam process, we have revised the design of our Statutory Declarations*. To help you further here are some important tips:

›       Make sure you tick either box (i) or box (ii) within Section 4 of the Declaration

›       If you tick box (ii) and you aren’t making a single claim because of the failure of the other party to respond within 14 days to your online claim, then you must attach the written notice that you have issued to the other party asking whether they accept your claim.

›       For landlords and letting agents, make sure you give details of your claim in Section 6 – if you don’t, your Declaration will be invalid.

Further details of the Joint Deposit Repayment process and ADR Service can be found via Ask Emma or our FAQs on our website or in our Terms & Conditions.

* Please note, the clauses within the Statutory Declarations have not changed as these are in line with the Statutory Instrument ’The Housing (Tenancy Deposit Schemes) Order 2007 No. 796, paragraph 3, "Custodial schemes: termination of tenancies - absent or un-cooperative landlord or tenant’.

Meet Emma, our new virtual agent on hand to answer all your questions

We’re continually assessing our customer support functionality and content to ensure it’s efficient, up to date and providing you with the best possible service, and it’s now even easier to find the answer to your enquiry with the help of our new virtual agent Emma. You can ask Emma anything relating to The DPS and she will return the most appropriate answer based on the information you have provided.

If you need further information or clarification on any of your questions, Emma will offer more options or direct you to our online contact form which, once submitted, will be sent directly to our Operations team who’ll respond as quickly as possible.

In addition and in order to streamline our support channels, we’ve created a new ‘Help’ page on the website where you can find all our online customer support. This ensures that you can find the answer to your question quickly, without the need to call or email us; enabling you to efficiently self-manage your tenancies.

On our new ‘Help’ page, you’ll find:

Ask Emma Our new virtual agent, on hand to answer all your DPS questions

Quick Links A list of our most common enquiries – click the relevant action to be taken straight to the right page.

Frequently Asked Questions Our extensive list of FAQs are an alternative to Ask Emma and address 90% of all enquiries – if the answer to your question is not there, you’ll be directed to an online form which is sent directly to our Operations team.

Glossary People are often confused by all the tenancy deposit protection jargon, this list of terms and phrases relating to deposit protection and our service will help.

Contact Us If you need to write to us, or call us, you’ll find our details here.

Whether you’re an existing customer with an enquiry, you’re looking to register with the scheme or simply have a question for us, our ‘Help’ page is the best place to start!

And coming soon – instant repayment ID reminders! The most common request on a daily basis is for repayment ID reminders. To ensure that you’re sent this reminder as quickly as possible, we’ve automated it so that as soon as you make the request via phone or online form, a repayment ID reminder email will be dispatched to you immediately without the need to speak to anybody.

We’ll let you know as soon as this is available.