Fri, 30 Mar 07
Landlords who take deposits from their tenants under an assured shorthold tenancy agreement must belong to a tenancy deposit protection scheme from 6th April 2007 or risk being taken to court and fined, warns the National Association of Estate Agents.
With only one week left until the legislation comes into effect, the NAEA is advising any landlords or lettings agents who have not already joined one of the three government approved schemes to act now. The Dispute Service, the Deposit Protection Service and Tenancy Deposit Solutions Ltd are all running either insurance backed or custodial schemes for landlords and agents to join.
Jan Bartlett, lettings expert at the NAEA, commented: As of 6th April if you let a property under an assured shorthold tenancy agreement the most common type in England and Wales you have to be part of a government authorised scheme. If you are not then you may be ordered to repay the deposit you hold, with the possibility of an additional fine. You may also be prevented from serving a Section 21 notice to evict your tenant if the need arises.
A number of organisations are claiming to be able to help landlords and lettings agents ‘get round’ the new legislation. It is worth bearing in mind, however, that the new rules will be strictly enforced so it may not be worth the consequences if you get caught out. The only other option is to not take a deposit from tenants at all, however, this is done at considerable risk and is not an advisable course of action.
The new legislation undoubtedly brings with it additional work. Sadly I have been contacted by a couple of lettings agents recently who are selling their businesses because the burden of red tape has become too much.
Trying to avoid the legislation, however, is not the answer as you will eventually get found out. On the positive side, the rules aim to provide much needed protection for tenants and to resolve issues and disputes far more quickly than is done currently, which is certainly good news for all involved.
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