Landlords > Desposit Administration
Introduction of deposit protection administration legislation has added a substantial administrative burden, and cost, to landlords who manage their own properties and agents who manage properties on behalf of landlords. We have found since its introduction in April 2007 that more and more private landlords are moving to the letting agent's managed service to ensure that the procedures are applied correctly. The principal components of this legislation is copied below. If you have any questions about this please do not hesitate to contact us.
We are members of the Tenancy Deposit Scheme, which is administered by:
The Dispute Service Ltd
If we are instructed by the Landlord to hold the Deposit, we will do so under the terms of the Tenancy Deposit Scheme.
If the Landlord decides to hold the Deposit himself, we will transfer it to him within 5 days of receiving it. The Landlord must then register it with another Tenancy Deposit Protection Scheme within a further 9 days if the Tenancy is an Assured Shorthold Tenancy. If the Landlord fails to do so the Tenant can take legal action against the Landlord in the County Court. The Court will make an order stating that the Landlord must pay the Deposit back to the Tenant or lodge it with the custodial scheme, which is known as the Deposit Protection Scheme. In addition a further order will be made requiring the Landlord to pay compensation to the Tenant of an amount equal to three times the Deposit. The Landlord will be unable to serve a Section 21 Notice on his Tenant until compliance with the above conditions and the Court will not grant the Landlord a possession order. We/the Agent has no liability for any loss suffered if the Landlord fails to comply.
We will hold tenancy deposits as Stakeholder.
At the end of the tenancy covered by the Tenancy Deposit Scheme
If there is no dispute at the at the end of the tenancy we will keep any amounts agreed as deductions where expenditure has been incurred on behalf of the Landlord, or repay the whole or the balance of the Deposit according to the conditions of the Tenancy Agreement with the Landlord and the Tenant. Payment of the Deposit will be made within 10 working days of written consent from both parties.
If, after 10 working days* following notification of a dispute to us and reasonable attempts have been made in that time to resolve any differences of opinion, there remains an unresolved dispute between the Landlord and the Tenant over the allocation of the Deposit it will (subject to the next paragraph) be submitted to the ICE (Independent Case Examiner of The Dispute Service) for adjudication. All parties agree to co-operate with any adjudication.
When the amount in dispute is over £5,000 the Landlord and the Tenant will agree by signing the Tenancy Agreement to submit the dispute to formal arbitration through the engagement of an arbitrator appointed by the ICE although, with the written consent of both parties, the ICE may at his discretion accept the dispute for adjudication. The appointment of an arbitrator will incur an administration fee, to be fixed by the Board of The Dispute Service Ltd from time to time, shared equally between the Landlord and the Tenant. The liability for any subsequent costs will be dependent upon the award made by the arbitrator.
The statutory rights of either the Landlord or the Tenant(s) to take legal action against the other party remain unaffected.
It is not compulsory for the parties to refer the dispute to the ICE for adjudication. The parties may, if either party chooses to do so seek the decision of the Court. However, this process may take longer and may incur further costs. Judges may, because it is a condition of the Tenancy Agreement signed by both parties, refer the dispute back to the ICE for adjudication. If the parties do agree that the dispute should be resolved by the ICE, they must accept the decision of the ICE as final and binding.
If there is a dispute we will remit to The Dispute Service Ltd the full deposit, less any amounts already agreed by the parties and paid over to them. This must be done within 10 working days of being told that a dispute has been registered whether or not the we, or the landlord wants to contest it. We are required co-operate with the ICE in the adjudication of the dispute and follow any recommendations concerning the method of the resolution of the dispute.
* These time scales can be changed by agreement with the tenant in individual cases or by the contract used as standard by the agent.