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Significant numbers of agents registered for Tenancy Deposit Scheme
publication date: Jun 29, 2007
One month after the introduction of mandatory tenancy deposit protection, the Tenancy Deposit Scheme, TDS, announced that it has registered well over 5,000 lettings offices to the scheme. Even at this late stage, an average of 45 offices are being signed up every day.
This number is believed to be a significant proportion of letting agents in the Private Rented Sector and follows a frenetic month. The scheme handled as many as 3,000 calls a week, with 81% of these completed to the caller’s satisfaction. However, many callers required initial advice and, very often, time to consider which of the three schemes they wanted to join. The mandatory requirement under the Housing Act 2004 for all new Assured Shorthold Tenancies to be covered by one of the three schemes authorised by the government came into force on April 6. This is usually any new private sector tenancy where the rent is less than £25,000 a year. With 5,200 offices registered, the Tenancy Deposit Scheme believes that a very high proportion of mainstream letting agents and the smaller independent offices are now registered.
“The industry has always had difficulty in establishing an accurate number of letting agents in England and Wales,” said Lawrence Greenberg, Chief Executive of the Tenancy Deposit Scheme.
He added, “However, with this number registered, it is fair to say that we have made significant inroads into ensuring that the agency side of the private rented sector is well covered for deposit protection. And in a remarkably short space of time.”
Despite this initial success, the TDS is warning agents not to be complacent. Although they have no need to be joined to any scheme until a deposit is taken on a tenancy for the first time since April 6, it still takes time to complete registration with an insured scheme like the TDS. The Scheme aims on 10 working days to complete the process. Said Lawrence Greenberg, “Too many in the industry, both agents and landlords, left tenancy deposit protection to the very last minute. In many cases, even the most basic level of understanding was lacking by the time the caller made initial contact with us. We spent a lot of valuable time taking applicants through the basics.”
In addition to regulated agents who are members of ARLA, the NAEA and RICS, many of those registered with the Scheme are members of other affiliated bodies such as the National Approved Lettings Scheme and the Law Society. The Tenancy Deposit Scheme is also open to corporate and private landlords.
“A number of significant corporate landlords, notably in the student market, have already joined the TDS and this steady flow of interest is continuing,” reported Lawrence Greenberg.
The service offered by the Scheme includes Alternative Dispute Resolution, as required by the government, and is free to tenants. Full information for landlords, tenants and letting agents is available on www.tds.gb.com or 0845 226 7837.
RENEWING A TENANCY
Many people have asked what is the situation if, at the end of an AST which started before 6 April 2007, the tenant wants to stay on There are two options:
1. The tenancy becomes periodic (e.g. carries on from month to month subject to notice) - absolutely no paperwork is required - and the only lawful way in which the rent can be increased under such a periodic tenancy e.g. by way of a section 13 notice, which is a prescribed notice.
2 A “replacement” tenancy is created. If tenancy does not go periodic when the fixed term expires i.e. a further fixed term is agreed between the parties. Whilst some in the industry might talk of a Memorandum of Extension (or use other words to describe paperwork) to facilitate this process, the Housing Act 1988 as amended by the 1996 Act solely refers to a “replacement” tenancy. Any such paperwork, no matter what it is called, therefore creates a “replacement” tenancy.
Reading the extract from the legislation there seems absolutely no question that a “replacement” tenancy is a new tenancy and thus the deposit is caught under the TDP legislation and, at that time, must be protected.