A Canterbury landlord has spoken to Student Tenant about his “bad experience” when using deposit protection schemes.
Matt, who manages a number of properties for a few landlords in Kent, said that “he is not prepared to lose out” anymore with the tenancy schemes, which he claims have cost him hundreds of pounds in cleaning and administration costs.
Matt said: “Arbitration allowed tenants of mine to leave a property in a filthy state, with additional broken and useless furniture to that provided along with other rubbish.
“In addition to all the actual costs to put the property right, because the tenants had nothing to lose by disputing the amount, I had to pay my staff hours to put together the case for the arbitrator. There were also unpaid bills that had to be settled.
“I no longer have any faith in the deposit protection scheme, it has proven to favour the tenants and left me hundreds of pounds out in addition to the hours I and my staff had spent.”
In England and Wales, if you rent your home on an assured shorthold tenancy that started after 6 April 2007, your landlord must place your deposit – a cash amount paid upfront when signing your tenancy agreement – in a tenancy deposit scheme.
There are currently four schemes operating; the Deposit Protection Service, MyDeposits, the Tenancy Deposit Scheme and Capita Tenancy Deposit Protection.
The government says that these schemes ensure you will get your deposit back after you leave the property if you “meet the terms of your tenancy agreement, don't damage the property and pay your rent and bills”.
But landlord Matt believes the system favours the tenants, because they have “nothing to lose”.
“The tenants provide no evidence, only claimed that they never saw an inventory”, Matt said when talking about one situation with one of his properties.
Matt says that he now opts for a one-off fee, paid by the tenant up front to cover administration costs.
Explaining the one-off fee, he said: “The one-off payment is not a direct replacement for the deposit, but an administration fee to cover the costs of the tenancy agreement, guarantor forms and other documentation.
“I have noticed a growing trend in landlords taking administration fees upfront in favour of a deposit over the last five years or so.”
Although he admitted it was a “risk”, he claims to have saved “hundreds of pounds” as a result of not using a tenancy protection scheme, and believes the one-off fee has “benefits to the student”.
“There are obviously benefits to the student in both arrangements, one being that the one off payment is considerable less than the deposit, easing their cash flow on an already tight student budget.”
However, when contacted by Student Tenant, one tenancy deposit scheme suggested that these one-off payments can end up “costly to both parties”.
Eddie Hooker, CEO of MyDeposits, said: “Nowadays very few landlords let a property without taking a deposit from their tenant.
“There are some landlords who choose not to take a deposit and also some that look for alternatives, such as taking a one-off, non-refundable payment from tenants. However, such initiatives can be costly to both parties and don’t afford the same level of protection that TDP provides.
“TDP was introduced in order to ensure the fair return of the tenant’s deposit at the end of the tenancy. Unless the landlord can prove they are entitled to make a deduction the law states that the tenant should receive their deposit back in full.
“Therefore, a non-refundable, one- off payment could prove costly for a tenant who meets their obligations during the tenancy and, similarly, is unlikely to provide enough compensation for a landlord should the tenant cause a high level of damage or default on their rent.”
For more information on Tenancy Protection Schemes, visit the GOV.UK website
Written By: Kieran Watkins