Tenancy deposit protection schemes guarantee that tenants get their deposits back once a tenancy is terminated and new laws in the United Kingdom (UK) are requiring landlords to register with these programs, but they do not believe they benefit from them. A survey by Imfuna revealed 54% of landlords felt these schemes tipped landlord-tenant disputes in favor of the tenant, while 35% believed the schemes benefitted neither. The survey also showed that only 43% of tenants were aware of this protection, although nearly all landlords have knowledge of it. Of those, tenants, who did know of the protections, a large majority still felt landlords are favored, demonstrating that position and perception may be more powerful than the protection itself. For more on this continue reading the following article from Property Wire.
A UK wide survey has found virtually no landlords think that deposit schemes are designed in their favour with 54% believing they favour tenants and 35% thinking neither benefit.
Letting agents also largely mirrored that sentiment with only 20% thinking that the schemes, in their current format at least, favoured landlords and 52% saying that the balance has been tipped in favour of tenants. A further 22% felt that the schemes benefit neither party.
The data from digital inventory platform, Imfuna, is published as the new Localism Bill comes into effect which means all landlords now face large fines of up to three times the deposit if it is not registered with a tenancy deposit scheme within 30 days.
The ruling, passed by the Government’s Department for Communities and Local Government will also see landlords unable to seek possession of their property using a section 21 notice until the penalty is settled.
‘The survey presents a picture of landlord disenchantment with the deposit schemes. The fact that not a single landlord surveyed felt they were designed in their favour, shows that there is still some work to be done by all parties in order to democratise the inventory process and ensure that everyone involved feels they are supported in equal measure,’ said Imfuna creator, Jax Kneppers.
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Overall awareness of the deposit schemes was found to be high amongst landlords with 99% knowing about them and 88% of lettings agents aware. But tenant knowledge was much lower however, with only 43% aware of the schemes before their tenancy began.
This lack of knowledge translated into the take up of the schemes with 49% of the tenants surveyed claimed they have not taken part in a deposit scheme.
Furthermore, 37% of landlords, compared to 78% of tenants, believe deposit schemes are an effective tool for minimising conflict between landlords and their tenants. Whereas just 19% of landlords and 36% of letting agents believe deposit schemes reduce the time taken over disputes, indicating the process still isn’t working.
‘The new ruling places an even greater emphasis on adhering to tenancy deposit schemes regulations. A comprehensive and robust inventory will help arm landlords with the necessary information and ensure they aren’t further penalised when it comes to the check in and check out process,’ said Kneppers.
The figures show that when disputes arise, people look to deposit schemes for help. The survey found that 26% of landlords, 26% of letting agents, and 57% of tenants believe deposit schemes provide a fair resolution when disagreements arise.
However, despite deposit schemes being preferred for resolutions, some tenants still think they are getting a raw deal, with 68% feeling that dispute outcomes were in favour of the landlord/letting agent, compared to only 10% of landlords, and 19% of letting agents.
Nearly half of letting agents, some 48%, and 30% of landlords reported that they have settled individual disputes privately, without the aid of a deposit scheme. But some 42% of landlords admit to having never had a deposit dispute with a tenant.
‘There is a case for making use of the technology and expertise available to make the difference in deposit disputes. This is a really exciting time for the property sector which is on the verge of a technological revolution, and we will all soon feel the benefits,’ added Kneppers.
This article was republished with permission from Property Wire.