Private Sector Tenants Lack Deposit Protection

Up to a million private sector tenants with combined deposits worth up to a £1 Billion are believed to be missing out on deposit protection. The number of tenants who are exposed is set to grow rapidly as the rental market soars. The lack of protection leaves an average deposit of £1,000 for each tenancy unsecured and the tenant without free access to alternative dispute resolution should there be an argument at the end a tenancy.

Landlords are also exposed. They are liable to a potential penalty of three times the amount of the deposit for failing to ensure the tenancy in their property is registered. At today’s rental values, this translates to an average penalty of £3,000 due to the tenant.

Through a new website launched this week by the Tenancy Deposit Scheme, tenants can now look up their own tenancy registration and view their Tenancy Certificate, which they should also have been given at the start.

Landlords relying on lettings agents, particularly those who are unregulated, can do the same to ensure they avoid legal penalties.

Tenancy Deposit Protection has been a legal requirement for the last four years for all Assured Shorthold Tenancies. These tenancies account for most rentals with a value of up to £100,000 a year.

According to the latest English Housing Survey Headline Report, the number of households renting privately rose by one million from 2.4 million in 2005/06 to 3.4 million in 2009/10, when the Private Rented Sector accounted for 15.6 percent – nearly one in six of all households in England.

Source: Tenancy Deposit Scheme