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Why Do Deposits Need To Be Protected?

Why Deposits Need to be Protected

It’s over four years since deposit protection was first introduced into England and Wales and 32,618 disputes later, it’s easy to lose sight of the reasons why tenancy deposits need to be protected.  Simply put, Tenancy Deposit Protection was introduced to provide a fairer system of resolving end-of-tenancy deposit disputes.  Prior to it’s arrival, the only recourse available was a lengthy, costly and stressful court battle, which often caused much hardship and inconvenience to all parties.

Demisting the adjudication process

What we have learned from this year’s programme of Meet TDS events across the UK is that most Agents try very hard to negotiate a settlement of the deposit.

Over the last year the TDS have published a lot more guidance to agents, landlords and tenants on the best  approach to dealing with disputes and it is clear that many Agents are using these guidelines in their negotiations with landlords and tenants.  If you haven’t seen them, visit http://www.tds.gb.com/case-studies.html – more will follow in the coming weeks.

The importance of inventories

Detailed inventories and check-in and check-out reports are critical in the event of a dispute, along with itemised schedules of work and detailed invoices.  A clear audit trail of correspondence and contact with the tenant is critical in good deposit protection.  If the Agent is clearly able to demonstrate to the tenant that there is a good case and a clear audit trail for any proposed deduction the tenant is more likely to agree.

The importance of regulation

Many TDS Members, including Sewell & Gardner, are regulated agents who are trying to compete on a level playing field with Letting Agents who are not members of a professional body or association, such as ARLA. The TDS knows from experience that unregulated agents are a higher risk to work with and some have already ceased trading, sometimes taking a considerable amount of their clients’ funds and tenants’ deposits with them.  That’s why, in order to become a member of the Tenancy Deposit Scheme, we will only consider applications from those agents who conform to the rules of a professional association, such as ARLA, and adhere to their rules for safeguarding client monies held. Those who meet these requirements will also possess a great marketing tool to reassure your landlords and tenants that they are in safe hands.

Take a fresh look at TDS

The Tenancy Deposit Scheme are the largest of the three tenancy deposit schemes and operate as a ‘not for profit’ company with NFoPP (ARLA & NAEA) represented on the Board.  If you want to ensure that your agent is taking care of client money, deposit money and representing clients in the best possible way, make sure you chose an agency who is a member of the TDS.

 

Adapted from a report by Steve Harriott, the Chief Executive of the Tenancy Deposit Scheme

August 2011

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