Lets start off with a post from July 2008 where I quoted a report from the DPS that 62% of landlords were flouting the tenancy deposit rules

Then in October 2008 the DPS answered a number of questions which had been raised by people commenting on the blog

In January 2009, following on from various rumours, I was able to report that the DPS is open to to all landlords

In March 2009 I reported on still more complaints received about the DPS arbitration system  and the fact that the complaints system cannot be used for the arbitration itself.

In May 2009 I reported on the problem of agents having run off with the deposit money and landlords being asked to refund the schemes after they had paid out the deposit money to tenants.  I suggested that the Deposit Protection Service , where this cannot happen as the they hold the deposit money, may often be best after all

In July 2009 I reported on a new blog set up by Kevin Firth which you can visit here.

In September 2009, just over a year after the 62% failure post, I blogged that the figure had now gone down to 30% of landlords

In October I commented on a circular I had seen which suggested that in tenancy deposit arbitrations, more weight is given to the evidence of inventory clerks as landlords themselves are not considered independent

I also reported on a readers story telling how the DPS had failed to pay the deposit money to her after getting a CCJ in her favour because the court order did not mention them

I also reported on the sad case of a tenant in despair after the DPS had paid her deposit money to her landlord.  This was because she had not sent her evidence to the arbitrator in time, because she had not received the letter telling her what to do

Then finally there is my interview of Kevin Firth in my Notable Propety Persons series.

I will be discussing with Kevin next week many of the issues raised about by these posts. But do YOU have any questions? What is your experience of dealing with the DPS. Please use the form on >> this page to let me know.

Introducing the DPS

The Deposit Protection Service (DPS) is one of the three tenancy deposit protection companies set up by the government to protect tenants deposits.

The DPS is the only ‘custodial’ scheme, and is completely free to use.  However unlike the paid for ‘insurance based’ schemes, the deposit money has to be physically handed over to the scheme administrators for them to hold until the end of the tenancy.

At that time the money will either be paid out to the tenant or landlord as agreed between them, or the money will be paid out as decided by arbitration.  Or, if the parties decide not to use the free arbitration service, as per a decision of the court.

Some reasons why people don’t use the DPS

Many landlords or agents prefer to use the paid for insurance based schemes because:

• They can keep the deposit money in their bank account
• And thus keep any interest earned on it (provided the tenancy agreement allows for this – which most do)
• They can have access to the deposit money during the tenancy, and
• They can pay it back to the tenant immediately rather than having to wait several days for it to be paid out by the DPS

A problem with the insurance based schemes

However there are hidden problems for landlords with the insurance schemes, if the deposit has been protected by an agent.  This is because the scheme protects the deposit for the tenant, not for the landlord.

So if the agent does a runner taking all the money with him, the tenant will get paid his deposit back by the scheme (My Deposits or TDS).  However the scheme will then claim against the landlord for the money they have paid out.

However if the money is held by the DPS, it is safe and this cannot happen.  The landlord is not at risk.

YOUR questions please

As many of you know, I am due to interview Kevin Firth of the DPS next week for my first Landlord Law Podcast.  During that interview I will have my own questions, but I would also like to put to him any questions asked by YOU.

For example, have you had a bad experience?  What about arbitrations, did they go well for you?  Have you had any problems with the paperwork?  Do you think the rules are difficult or obstructuve?  Are there any things you would like clarified about the system?

Or maybe you have had a brilliant experience and would like to share that with us?

Whatever it is, you can tell us your story or ask your question via the form you will find on this page.

I look forward to reading them.

How safe is your tenancy deposit?

Basically if it is protected in a scheme it is safe, if it is not protected, it may not be.

From 7 April 2007 all tenancy deposits for assured shorthold tenancies have to be protected in a government authorised tenancy deposit scheme. There are three tenancy deposit schemes:

• The Deposit Protection Service
• My Deposits and
• The Dispute service / TDS

When you pay a deposit to a landlord or his agent, they are supposed to arrange for this to be protected within 14 days and give you a form with information about the scheme they have used.

What if you have not had the notice?

This will normally indicate that your deposit has not been protected. But you can check by contacting the three schemes and asking them. Their contact details are as follows:

• The Deposit Protection Service : website: www.depositprotection.com, tel: 0844 4727 000
• My Deposits : website: www.mydeposits.co.uk, rel: 0844 980 0290
• The Dispute Service / TDS : website: www.thedisputeservice.co.uk, tel: 0845 226 7837

If your landlord has not protected your deposit, what should you do then?

Well the best thing to do is to write to him.

Tell him that your deposit should be placed in a deposit protection scheme and ask him for confirmation that this has been done. You could also say that if he does not, there is a penalty of three times the deposit sum for non compliance.

There is no need to mention the fact that after the Tiensia case, the landlord will be able to protect the deposit late without penalty! In any case it is believed that this case is going to be appealed to the Supreme Court so this may change.

Hopefully your landlord will then arrange for your deposit to be protected so there won’t be any need for you to withhold the last months rent in lieu of being returned the deposit, as was often done by tenants in the days before the tenancy deposit scheme came in force (although you are not supposed to do this).

What if you find out that your deposit has not been protected after you have moved out?

You are probably in a stronger position vis a vis the penalty as it is understood that the rule in the Tiensia case does not apply if the deposit is unprotected when the tenant moves out.

Indeed we have a no win no fee service which relies on this, where a claim will be brought both for your deposit and for the award of three times the deposit sum.

Any questions?

If you have any questions about tenancy deposits, note that I will be interviewing Kevin Firth, the director of the Deposit Protection Service next week, for my first podcast, and will be putting to him questions received from readers to answer.

You can read a bit more about this and find a form for the questions >> here.

You can also find out more about tenancy deposits on my Landlord Law site.

Photo by Jo Naylor

A new initiative for the new year is my podcast series.  I’m hoping to do one per month and I have some great guests lined up for you.

To tell you a bit more (and to practice with the audio equipment) I have done a short audio which you can listen to, explaining a bit more about it.  Turn your sound up and click the little arrow to start it.  You’ll hear our theme music first.

You can read Kevins NPP post here.

Questions are now closed for the podcast, thank you to everyone who submitted a question.

1. Please introduce yourself.  Say a bit about yourself and your company

I am Kevin Firth, Director of The Deposit Protection Service, the only Government approved custodial scheme responsible for protecting rental deposits on behalf of Landlords, Letting Agents and Tenants.

The custodial scheme was originally intended to offer deposit protection to small private landlords and their tenants; as it’s free it was seen as the the ideal option for landlords with a small portfolio of properties. However, since we started back in 2006, we’ve seen a surge in our popularity amongst letting agents and landlords with much larger property portfolios and can now boast over 18,000 agents and 220,000 landlords.

Before heading up The DPS, I worked for the Bank of England for over 25 years.

2. How did you first become involved in property?

As an Australian company Computershare was already running a custodial scheme in Victoria so was ideally placed to bid for the UK scheme. I was part of the successful bid team who won the prestigious contract to provide the custodial scheme and so I took my first steps into the property industry when that process began back in 2004.

Since then I’ve seen the other side of the industry as well – with 3 daughters renting student properties, I’m practically a tenant too!

3. What do you think is your greatest achievement so far?

In business, I’m particularly proud of growing the DPS business from scratch – unlike the other two TDP schemes we did not have a database of members. Instead we were nervously hoping on day one that we would see some deposits registered. We now average 1500 deposits a day and even have landlords submitting deposits on Christmas day!

4. Do you or your company have any exciting plans for the future?

We’re always looking for ways to innovate and develop our services. We recently launched SMS alerts which help landlords and tenants stay on top of deposit repayment milestones. There are a couple of things in the pipeline but I’m going to keep them to myself for now!

5. What do you think are the greatest problems facing the private rented sector today?

The raft of legislation and regulations that new landlords are confronted with when they rent their first property.

6. What do you think are the greatest opportunities?

Buying and renting property can bring financial rewards – but remember it is a business that needs investment – paying for services such as independent inventory clerks will greatly reduce any potential losses at the end of your tenancies.

7. We have a new government.  What would you like them to do for the private rented sector?

I’d like them to make a fundamental change to the TDP legislation and place responsibility for protecting the deposit with the tenant. This way agents or landlords would never have access to the cash thus ensuring 100% compliance with the law – simple!

8. Do you use social media (blogs, twitter, LinkedIn etc)?  What place do you think it has in the future of the property industry?

Yes I’m a big supporter of social media. I’ve got my own blog (www.thedpsblog.com) and Twitter account (@The_DPS) which I try to keep updated. I think it’s important for businesses to take advantage of these channels; the informality of it all makes them more open and honest so you can really gauge public opinion. I’ve always got Tweetdeck open so I can check the latest news from the industry and answer questions from customers.

Social media provides direct access to a company, in my case the head of the company, what better way to offer your feedback or get your questions answered?

9. What is the most important lesson you have learned during your time in Property?

That people leave crazy things behind when they leave a property – it’s really opened my eyes to the nature of the British public – ‘Titillating Tales of Tenants’ Secret Lives’

On a more serious note – there are two sides to every dispute and there will always be an aggrieved party in every case.

10. What advice would you have to someone thinking of entering the property industry today?

My advice to new landlords would be to join your local landlord association and learn from others’ experiences.

Tenants should treat their rented property as if it were their own; the majority of landlords are good guys and will return their deposits in full if they follow this simple advice.

*****

Thank you Kevin.  I hope you’ll let me know about the DPS secret plans in due course!

To find out more about the DPS and the service they offer visit the web-site www.depositprotection.com.