Lettings chain Martin & Co has again added its voice to a call for a single tenant deposit scheme – a custodial one.
Ian Wilson, managing director of the 170-branch franchise business, first made the call in April 2009.
He also hit out at the Government’s failure to go further in legislation covering the security of tenants’ deposits. He said then that there is “huge opportunity for abuse”.
The firm at around that time had to strip some of its own franchisees of their licences after deposits were misappropriated, but it has since cracked down hard on compliance.
Wilson has spoken out again after a ‘think piece’ published in Landlord's sister publication, Letting Agent Today. See the link at the end.
But what Wilson said two and a half years ago has changed little as far as his firm is concerned
He said then that many landlords and agencies were still holding deposit monies themselves and not complying with the regulations.
He said both the custodial and insurance-backed schemes permitted by the Government had major flaws in that they allow the landlord or agent to handle the money directly – allowing them the potential to misappropriate it.
He said: “The tenant may not know of their loss until they try to recoup their deposit at the end of the tenancy. Many tenants still remain unaware of the landlord’s obligation to provide written confirmation of the scheme being used.”
He added: “Be it deliberate negligence or unwitting ignorance, landlords or their agents who do not lodge deposits properly and adhere to the rules are not only jeopardising tenants’ money, but they are also exposing the landlord to harsh penalties which can devastate their return on investment.
“This remains most unsatisfactory, as there is still a huge opportunity for abuse.
“The obvious solution is to clarify the rules and streamline them into one, well-publicised process via a single scheme – and ideally one where the tenant can lodge their monies directly into a custodial account without any monies passing through the hands of the landlord or letting agent.
“In this way, there would be no missing money, no confusion as to how the scheme operates, no mystery about where the money will be held, no threat of an agent or landlord going under and taking the deposit with him, no more court action for non-protection of monies, no hassle of late deposits, and no shady third party bank accounts.
“Indeed, the Government’s original statement that tenants could sleep well at night knowing that their deposit monies are safe would then be accurate.”
Two and a half years on, Martin & Co stands by all it said then.
For more on this, see today’s blog by Martin & Co’s Sue Hopson, the firm’s brand standards director who is in charge of compliance.
https://www.lettingagenttoday.co.uk/news_features/Is-there-an-argument-for-making-all-agents-use-custodial-schemes
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Comments
I would like to know how landlords are supposed to sleep at night? Recently tenants seem to have the upper hand in everything.
How are we supposed to trust them to put this money into a deposit account and then ultimately, when they wreck our property or leave bills and rent unpaid, how are we supposed to retrieve this? It is getting to the point where we might just as well take no deposit at all and let them have free rein once and for all.
You cannot stay in a hotel without giving them an imprint of a credit card which is a system that I hate as I really do worry about that card being left on account and open for anyone to abuse and yet no legislation is being put into place about that practice and yet landlords are constantly being put in the dog house about wanting some guarantee that these tenants are going to respect their property whilst living there.
I am both a good landlord and a private letting manager ( I am not a high street agent) and when I submit the deposit to the government scheme a confirmation of this is sent to my tenants. I always make them aware that they must watch out for this confirmation.
I sometimes think it is down to the individual landlord/agent to have a better relationship with their tenants. I have been in this business for over 10 years and not once have I fell out with any of my tenants over their deposits both when I was holding them or more recently now that I have to place in a scheme. When I have done their sign out on them vacating and pointed out that they have caused damage and referred back to their original inventory they have always been happy to admit their wrong doing and the amount has been discussed between us and deducted. For me that has happened only three times in ten years. You might think I have been lucky but I do not put it down to that. I choose my tenants very carefully and I treat them firmly but with great respect and I find that works for me.
No doubt there will be many of you think I am wrong but I will continue my way until yet another do gooder who wants to place a halo over their heads for yet another heavenly deed they have achieved to place all the rights into the hands of tenants and leave landlords to pick up the pieces and become vunerable to the needs of uncaring tenants yet again!!