284,000 landlords risk being fined over tenant deposits
New research has revealed that 284,000 landlords are at risk of being fined because they have failed to protect tenants’ deposits in an approved scheme.
The survey by the Centre for Economics Business Research (CEBR) suggests that more than £500m worth of tenancy deposits are being held illegally by landlords.
The law requires that deposits paid by tenants should be paid into a government-backed Tenancy Deposit Scheme (TDS) within 30 days of receipt. Landlords who fail to comply face a fine of up to three times the value of the deposit.
The three approved schemes are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Service.
The CEBR estimates that there are now nearly 2 million landlords in Britain. Its research found that 85% of them are complying with TDS regulations, which suggests that approximately 284,000 are not in compliance.
Hannah Maundrell of money.co.uk, which commissioned the research, said: “While many landlords are doing the right thing and protecting deposits in one of the official government-backed schemes, a worrying amount of money is falling through the cracks and far too many tenants are being left vulnerable.”
Landlords should also realise that they can’t rely on Section 21 notices to evict tenants if they fail to comply with the TDS requirements.
Please contact us if you would like more information about the issues raised in this article or any aspect of commercial property law.