Latest Property News around Barry, Cardiff, Bridgend

More than one third of UK landlords are still unaware of the Tenancy Deposit Scheme (TDS), according to a survey commissioned by The Money Centre, an independent buy-to-let mortgage broker.

And for investors with only one buy-to-let property, this figure was even higher, with 43 percent unaware of the scheme.

A further 20 percent of respondents said they were aware of the scheme but did not fully understand it, leaving less than half (44 percent) who said they were aware of the scheme and understood it.

This means many landlords could find themselves committing a civil offence and forced to pay a tenant three times the amount of the deposit as well as losing their automatic right to regain possession of the property at the end of a tenancy agreement.

The survey, conducted in August and September, found that 36 percent of landlords questioned were unaware of the Tenancy Deposit Scheme, introduced by the Government on 6th April 2007 to protect tenancy deposits and provide a fairer system for settling disputes about the return of a deposit at the end of a tenancy.

Lynsey Sweales, Marketing and PR Director of The Money Centre, said: “We are very worried by the results of this research which shows low awareness and understanding of the existence of this legislation and its implications, several months on from its introduction. This is bad news for both tenants and landlords as the scheme is designed to protect both.”

The research also found that 55 percent of landlords have had to withhold all or part of a tenant’s deposit to cover property damage and other costs (such as cleaning costs and unpaid utility bills) at some stage.

Therefore, it may not be long before problems arise due to a lack of participation in the scheme, and if a landlord or agent does not protect a tenant’s deposit, they can be ordered by the local county court to pay the tenant three times the amount of the deposit.

Sweales added: “The Money Centre would like to see the Government renew its publicity drive about the scheme, to ensure awareness, understanding and participation of the scheme is improved.

“ We also urge landlords who are not up to speed with the TDS to do their research immediately and advise them to join their local landlords’ association. These organisations provide advice and guidance to their members on changes in legislation and can act as a forum to share best practice.”

The findings have not shown a vast improvement over time: The research conducted in August / September showed only a marginal increase (1 percent) in awareness of the TDS since previous research carried out in May, in which 37 percent of respondents said they were unaware of the scheme.

While the TDS only covers tenancy agreements made on or after 6th April 2007, as time goes on and tenancy agreements are renewed and changed, all landlords will eventually become affected. It is therefore vital that landlords take the time to understand the TDS now and avoid become in ignorance of the law.

The research was undertaken by independent research agency BDRC on behalf of a syndicate of buy-to-let mortgage lenders and brokers. 523 online interviews among residential property investors were conducted between 17th August and 6th September 2007.