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New rules for UK deposits

Monday, March 22, 2010

Source: Catherine Deshayes

New rules that, from October, will oblige UK landlords to formally protect deposits on tenancies worth between £25,000 and £100,000 a year have been welcomed by the Deposit Protection Service (DPS)...

According to the firm, the move will bring around 15,000 new tenancies under the umbrella of deposit protection.

The original tenancy deposit legislation covered Assured Shorthold Tenancies of up to £25,000 because tenancies valued above this were seen as contractual tenancies, where deposits did not need to be protected.

However, the DPS believes this left some groups vulnerable as director, Kevin Firth, explains: "While it is natural to think of a high value tenancy and conclude that we are in the realms of the rich and successful, often the opposite is true."

He adds: "Students, for example, often group up and move into large houses, paying a combined rent that easily exceeds £25,000 annually."

In related news, The Dispute Service (TDS), which is responsible for the UK's Tenancy Deposit Scheme, has recently hiked its fees.

However, the the National Landlords' Association (NLA) says the increases should not detract from the purpose of tenancy deposit protection i.e. offering legal protection for tenants where landlords wrongly withhold all or part of their deposit.

The body's chairman, David Salusbury, said: "All-in-all, tenancy deposit protection legislation has proven to be a success and current issues must not alter this message."

Source: www.homemove.co.uk