LandlordZONE Newsletter - The Tenancy Deposit Scheme

March 2007 - Issue 17

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If you are about to let your property you might just have time to miss the April 6th deadline for the new Tenancy Deposit Scheme, but any lettings you do after that date, and any tenancy renewals will have to come into the scheme.

Of course, there’s no law which says you must take a deposit, so you don’t need to become involved if you don’t want.

But most landlords/agents take deposits because of the protection afforded by them and the sense of responsibility they impose on tenants.

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Landlords, planning on buying another UK property in 2007?

Why not diversify your portfolio with property investments in the rapidly emerging global markets for stronger returns.

A recent survey carried out by GFK NOP for Bradford and Bingley* suggests that confidence in buying to let in 2007 is higher than last year. 55% of landlords surveyed said that they plan to buy another property however with the average total returns on UK buy to let investments at 13.3% (Paragon Mortgages Nov. 2006), are there other property investment opportunities available elsewhere for sophisticated landlord investors seeking higher returns?

Globalisation has meant that the world is now our back yard. Investors are no longer limited to their own region or country and are able to take advantage of exciting opportunities overseas. The emerging markets of Eastern Europe for example have vastly opened up since the fall of communism (and maybe have emerged!), they are still welcoming foreign investment and supporting development to boost their economies. It is in countries such as Bulgaria and Romania, EU members as of 1st January 2007, and Croatia and Montenegro, who are expected to join by 2010, where interest in property investment is high and profit margins are too.

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Deposits and Their Status - Know Where You Stand

This article is mainly aimed at the professional letting agent, but if you are a landlord with two or more properties, in the eye of the law you are “in business” and therefore have the same responsibilities as a high street agent.

It is absolutely essential for agents, landlords & tenants to appreciate the status of dilapidation deposits, or bonds as they are sometimes referred to, and thus help prevent conflict concerning any of its retention at the end of a tenancy. I have diverged slightly into inventories to qualify one or two points.

Firstly the money belongs to the tenant, and as agent or landlord you are holding it in trust on their behalf. There are two ways in which it can be held, as landlord’s agent or stakeholder. Its status should be clearly defined within the tenancy agreement, on what grounds it will be returned and when, but rarely is. You should ideally have written evidence (i.e. receipts) that all utility bills have been paid by an outgoing tenant and that all dilapidations or arrears of rent have been accounted for before returning it to a tenant, otherwise it will open to challenge. Courts in my experience expect landlords to be �spot-on”.

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