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Tenancy Deposit Scheme Announces Full Pricing Structure

publication date: Apr 12, 2007
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In addition to accepting all members of ARLA, the NAEA and the RICS, the Tenancy Deposit Scheme is to accept firms accredited by the National Approved Lettings Scheme, NALS, as part of an approved accreditation scheme, it has been announced.

As a result, the annual subscription for an average portfolio of properties let through a NALS member letting office has been substantially reduced from the standard £997 - for agents belong to accreditation schemes – to £818. (The rate for ARLA members is £521.) NALS members will also benefit from the accelerated application process and, in most cases, automatic acceptance. However, subscription costs will be subject to negotiation when portfolios of individual lettings offices substantially exceed the average.

Welcoming the agreement reached between NALS and the TDS, Isobel Thomson, Operations Director of NALS, said, “This puts NALS firms in a positive position and recognises the strict criteria they meet as part of a government backed accreditation scheme.”

The Tenancy Deposit Scheme has also announced the pricing structure for members of other accreditation schemes at £997; for regulatory bodies at £521; trade associations for lettings agents £1,243, and for unaffiliated agents, £1,609. All agents can recharge the TDS subscription across their portfolios which will work out at very little for each property.

The TDS has also announced subscriptions for landlords to join the scheme in their own right. Those who are members of trade associations will pay £44 + VAT for each property. The annual subscription for each property for unaffiliated landlords will be £95 + VAT. For corporate landlords, prices will be discussed on application.

Ensuring that the entire pricing structure for the Tenancy Deposit Scheme was announced well in advance of April 6, when deposit protection becomes mandatory, Lawrence Greenberg, Chief Executive of the TDS, said, “Our price structure has to be all about risk management, particularly the cost of dispute resolution. In many instances, we have absolutely no track record to work from, so these prices will have to remain in place until that can be established.

The Tenancy Deposit Scheme is one of the three authorised deposit protection schemes confirmed only last November for the start date of April 6, 2007. The service provided by all three schemes is free to tenants.

Full information for landlords, tenants and letting agents is available on www.tds.gb.com or 0845 226 7837.

REGISTERING FOR THE TDS SCHEME

Some agents who are currently members of the TDSRA and expect to be ‘passported’ into the new scheme should be aware that they are not automatically registered and will be acting illegally if they continue to take deposits after April 6th without having actually declared their wish to join.

Agents MUST go to the TDS website - www.tds.gb.com - and click on ‘How to Join’. This will open a window with details and a link to the form for existing members of TDSRA.

There is a different link for those who are not currently registered with TDSRA on the same page.

Please make sure that you do complete the appropriate form as soon as possible!


ARLA letting agents support educational efforts

ARLA, the Association of Residential Letting Agents, is supporting efforts to ensure landlords understand their legal obligations over deposits and is taking steps to ensure that the Tenancy Deposit Scheme works efficiently for them.

To back up letting agents who are members of ARLA, the Association has produced its own leaflet in a bid to educate client landlords and tenants in the obligations and rights under the new deposit protection laws that come into force on April 6.

The leaflets explain the concept behind tenancy deposit protection, the types of scheme, -insured or custodial - and the benefits of alternative dispute resolution.

Said Adrian Turner, ARLA Chief Executive, “Surveys show that most of the industry professionals understand tenancy deposit protection. The problem letting agents face is how to ensure that landlord clients and their tenants understand that tenancy deposit protection is becoming mandatory and that the well-tried Tenancy Deposit Scheme is the simplest route, for landlords and agents to take to abide by the law.”

ARLA is pressing its members to review their policies about inventory and condition reports and to make their landlords aware that they need them. Inventories will be critical under the new legislation.A guidance manual for the best practice in inventory making with examples and a template is available from ARLA and the other professional bodies.

Inventories will play a major role in establishing the facts behind any landlord and tenenat dispute and in making the most efficient use of Alternative Dispute Resolution, part of the package that comes with deposit protection schemes

Without obvious proof of loss or damage, it is probable that all the deposit money will be returned to the tenant by the Independent Case Examiner. The deposit protection explanatory leaflets are available through all letting agents who are members of ARLA. Links to the Deposit Protection Scheme and details of other legislation effecting landlords in the private rented sector can be found at www.arla.co.uk

A publicity campaign by the Department for Communities and Local Government (CLG) has been launched explaining how Tenancy Deposit Protection (TDP) will benefit private tenants and landlords in ethnic minorities. The campaign will include two leaflets; one directed at tenants and one at landlords and agents, as well as radio and press advertising and will be translated into Bengali, Urdu, Polish, Chinese, Turkish, Welsh, Punjabi, and Gujarati.

Tenants from ethnic minority communities are more likely to be in private rented accommodation, and in the case of recently arrived immigrants are less likely to be aware of their rights or have problems with the language barrier. In 2003/4, 34 per cent of tenants from ethnic minority communities didn’t have their deposits returned either in full or at all. Without obvious proof of loss or damage, it is probable that all the deposit money will be returned to the tenant by the Independent Case Examiner. The deposit protection explanatory leaflets are available through all letting agents who are members of ARLA. Links to the Deposit Protection Scheme and details of other legislation effecting landlords in the private rented sector can be found at www.arla.co.uk

The existence of the ADR will also encourage tenants and landlords to have clear agreements, such as inventories, on the condition of the property from the outset – offering additional protection to landlords.

Housing Minister Baroness Andrews said:

“Many people have lost their deposits due to various reasons. We often hear stories of landlords and agents taking advantage of tenants and refusing to refund deposits. Sometimes tenants are not aware of their rights so we are highlighting the schemes to help prevent this from happening.

“At the same time the scheme also provides landlords with a secure way of ensuring deposits are safeguarded by encouraging clear inventories and agreements prior to the payment of the deposit and a free arbitration service to deal with any disputes.“

Agreement CLG also presented some case studies:

1. A Portuguese tenant with limited English found that at the end of his tenancy some of his deposit was deducted by the letting agent not only for repairs, which he accepted, but also for a fee to cover the cost of inspection and arranging repairs. He feels aggrieved because this fee, which amounts to more than the actual cost of the repairs, was not specifically mentioned in the tenancy agreement and came as a shock to him. He feels that the rules have changed during the term of the contract and this does not seem fair. (He was warned of this fee in the guidelines for vacating tenants but that was only within a few weeks of actually finishing the tenancy.)

2. A mixed race married couple rented a two bedroom flat in November 2003 as an Assured Shorthold Tenancy. They paid a rental deposit of £900.00. The tenancy agreement was extended twice and they finally vacated the property in August 2005. They were unable to extend the rental as they were informed that the property required repairs, redecoration and new carpets. They fully expected their deposit to be returned as on vacating the property they were told everything was fine. Two and a half months later they received a letter from the lettings agency stating that they owed £455.86 for cleaning, repairs and pest infestation. There was also a charge of £377.92 because of delay in being able to rent the flat. During their 21 months in the flat, they had reported blocked drains on two occasions. Before they left, they had found a cockroach and had bought a pesticide spray and dealt with it. They had not seen any more pests. They were caused unnecessary extra stress and financial difficulties as a result of the delay in getting their deposit returned and the need to go through the small claims process.

3. A British Asian tenant paid £1,100 deposit at the start of a 6 month private rental through a lettings agency. She expected that about £250 would be retained for carpet cleaning at the end of the tenancy. She reported a faulty dishwasher and heater several times early in the tenancy with no result. She did not report a small leak under the kitchen sink which she dealt with by leaving paper to soak up any leaked water. She could see no water damage. The landlord says he is withholding all the deposit because client did not report the leak.



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