According to TDS (Tenancy Deposit Scheme) less than 1% (0.85%) of tenancies they handle have resulted in a deposit dispute in the year to March 2018, nevertheless it’s important to get it right when dealing with tenants’ deposits.
Cleaning was the most common issue leading to a deposit dispute, cited by TDS in 54% of all disputes handled through adjudication, closely followed by damage (49%), decoration (31%), rent arrears (20%) and gardening (16%).
The Tenancy Deposit Protection (TDP) legislation was first introduced on the 6 April 2007, with amendments to this following several court cases in the Localism Act 2011, and the Deregulation Act 2015. These additional changes can easily be overlooked by landlords and letting agents in has become a more complex set of rules.
The Deregulation Act 2015 changes brought in the concept of the “relevant person”; a person or organisation, someone else providing the tenancy deposit on behalf of the tenant.
What are the implications?
Where the deposit is paid by another person other than the tenant, or if the provision is joint between the tenant and the “relevant person”, another person/s or organisation, then all parties must be provided with the Prescribed Information (PI) which also includes their details.
So, similar to the situation where a guarantor is involved, all the necessary information must be provided to all parties and any changes mean they must be kept informed.
A relevant person, as far as tenancy deposits are concerned, might be a Local Authority, an Employer, a Guarantor, a friend or a family member. It is important therefore that landlords ask the question: who provided the deposit? It would be wise to include this question in the Tenancy Application Form for future reference.
If someone or some organisation pays the deposit, or even part of the deposit, it is important that they are served with the relevant PI documents, including the deposit scheme leaflet, and that proof of this service is obtained at or near the outset of the tenancy – 28 days are allowed to protect deposits and serve the prescribed information.
Landlords and letting agents should be aware of this obligation and take steps to build it into their administration process. Every time a tenant pays the funds for a deposit either in cash, cheque or card, they should be asked to confirm the origin of the payment.
A paper trail should then be established in the files to enable the correct documents to be served at the right time and to the correct people, and proof to be provided in the event of any dispute.
It is also advisable that the details of deposit scheme to be used, the payments made and who paid, are recorded in the tenancy agreement.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.