Letting agents and landlords are being warned of an increasing number of ‘ambulance chasers’ seeking ‘no win, no fee’ tenancy deposit claims.
The warning comes after a growing number of information requests to tenancy deposit schemes from claims management companies who, on behalf of tenants, are targeting landlords who may not have protected deposits properly, or given the correct Prescribed Information.
The issue, which we have highlighted before, was aired on Friday on BBC Radio 4’s You and Yours programme.
Carolyn Uphill, chairman of the National Landlords Association, warned landlords to ensure that they have fully complied with tenancy deposit protection law.
She said claims companies seem to be inviting tenants who have not received their Prescribed Information to make a claim even if the deposit is protected.
Uphill said: “You have to ask where the financial loss for the tenant is. The majority of tenants’ deposits are being protected and 99% of tenancies end without any issues over the return of the deposit.
“Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.
“Of course, where there is blatant disregard for the law, landlords can have no argument and must be brought to rights.
“However, these claims firms are looking to exploit those landlords who have protected their tenants’ deposits but may not have properly issued the Prescribed Information.
“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.
“This sort of action is morally questionable and unnecessarily punitive, and will only work to undermine the good relationship that exists between the majority of landlords and their tenants.”
Eddie Hooker, CEO of Mydeposits, the tenancy deposit scheme owned by the NLA, said: “It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant. Landlords must be aware that they are ultimately responsible even if they use a letting agent.
“Our advice is to check with the agent or directly with the deposit protection scheme to ensure all of the deposits have been properly protected.
“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.”
Here is how we covered the story:
http://www.lettingagenttoday.co.uk/news_features/Claims-firm-sets-up-to-help-tenants-win-deposit-loophole-cases
Comments
If you are an agent and have not registered the deposit, what ever reason, but the deposit is in your client account and you have CMP, I think it would be hard for a tenant to make any kind of claim since it has to be proven that you intentionally decided not to do it for reasons that are fraudulent, and if you register it when you have noticed it has not been done then so be it.
Why are Sales agents regulated and Lettings not, since lettings deal with client monies but sales agents don't?
Lettings agents in the true form as lettings and client property management are more qualified, and have to handle clients monies
'A periodic tenancy is deemed to be renewed at the expiry of each period'
If it's renewed then it follows it's a 'new' period which means the prior period is no longer relevant. It further follows that if a tenancy went periodic 6 months ago but you're evicting now then logically the only period being looked at is the current one (not 6 months ago) and that should allow time to comply.
Works for me...
IO
Most tenancies which have gone SPT are beyond the 30 time limit so an agent is basically stuff if the unintended consequences are to be believed.
I repeat
There is a huge amount of info now coming out and complex tables. In simple terms:-
Every time you do a re-let to new tenants protect and serve PI
Every time those tenants renew do the same
If those tenants go periodic, do the same
On existing tenancies
If they renew, do as above
If they go periodic, do as above
On all existing tenancies where they are still fixed term or periodic - review your paperwork and if not 100% correct i.e. you have protected and served 100% correct PI.
Then decide what to do between nothing, satisfying TDP, or doing a renewal and satisfying TDP
All other comment is just additional words - do as above and be 100% safe.
Or don't and risk it
This company was set up by one of Bournemouth's leading letting agents. Lots of claims could put his competitors out of the market place very clever praying on the letting agents who do not do their job properly anD there is a lot of them about..