Which? report claims deposit system is broken

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Tenancy Deposits:

Eddie Hooker, CEO of mydeposits, comments on the report that claims the deposit system is “broken�

A major Which? report released today suggests the current deposit system is broken and calls for review of the current cash-based deposit system. Eddie Hooker, Tenancy Deposit Protection scheme mydeposits CEO for the last 12 years, comments in response:

“Since their introduction more than 12 years ago, Tenancy Deposit Protection schemes have consistently delivered a good service for the majority of tenants.

Whilst I recognise that the systems and processes of deposit protection may need updating to deal with today’s rental market, having carried out extensive research I do not believe that overhauling the current system in favour of, for example, no deposit insurance alternatives, offers any greater protection for tenants. 

Yes, there is an affordability issue for tenants, particularly those in London having to find on average £2500, and this is an issue that must be addressed.  However, purchasing an insurance policy which reimburses a landlord if the tenant cannot or will not pay any losses, simply buys the tenant out of having to pay a deposit and could place tenants is a worse situation some years down the line.

Ultimately, tenants are still liable for recompense to an insurance company which many tenants simply do not realise. The fees/premiums charged over a 10-year renting period, could end up costing the tenant £6,000-£7,000 for nothing. What many don’t understand is that deposits are refundable if the tenant abides by the terms of the tenancy agreement. Insurance premiums are not. 

 Any change to the current TDP system should recognise and embrace the existing benefits, such as Alternative Dispute Resolution, but be enhanced.  Options such as deposit loans, custodial only schemes or deposit passporting could address affordability issues and offer tenants greater control, while continuing to give landlords the confidence to remain in the buy-to-let market.�

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High Court Right to Rent challenge set for December

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A date has been set for the hearing of a High Court challenge of the Government’s Right to Rent scheme. It has been confirmed that the legal challenge of Right to Rent, launched by the Joint Council for the Welfare of Immigrants (JCWI) will take place on the 18th and 19th of December. The legal […]

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IMPORTANT MESSAGE from Mark Alexander

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This weekend I have a simple request to all Property118 members.
If you haven’t already done so, please sign my Housing Policy petition to Theresa May.
LINK TO PETITION HERE

We don’t need to get 100,000 signatures to make this campaign successful.

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Property Redress Scheme signs up 9,000th member

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 Redress Scheme:

After Ombudsman Services: Property (OS:P) decided to withdraw from offering redress to the property sector, the PRS has been on hand to help agents such as Savills, Knight Frank, Strutt and Parker, Winkworths and Chancellors as well as National Approved Letting Scheme and Association of Residential Managing Agents (ARMA) members continue to comply with their mandatory requirement for property redress.

Since the beginning of July, the scheme has seen over 1,750 new member branches sign up, as the 6^th August deadline to obtain membership of one of the two remaining redress schemes passed.

The PRS saw a huge rise in complaint notifications last year – as stated in the PRS Annual Report 2017 – and is continuing in its responsibility to the property sector to offer free and fair redress to consumers.

Head of Redress at the Property Redress Scheme, Sean Hooker said: “We’re delighted to reach this milestone. We recently celebrated our fourth birthday as a scheme and getting to 9,000 members at this point was way beyond what we expected when we launched back in the summer of 2014.

“The withdrawal of OS:P may be an inconvenience for their members and risk them falling foul of the law; however, they can stay compliant immediately by registering with the PRS.

“The process is quick and simple. Once they have joined, they will enjoy a first-class service and have access to helpful information and advice to help you manage complaints.�

Agents of any size can benefit from a single price-point and simple sign up process. The Property Redress Scheme provides two membership models, the enhanced which costs £199 plus vat per branch and the entry model which costs £105 plus vat per branch. The PRS acts in accordance with industry codes of practice rather than having its own.

The PRS has also just launched its partner page so PRS Members can benefit from special offers on associated services they may legally require to stay compliant.

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Government has a Lemming Instinct!

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Maggie Thatcher said you can have the Channel Tunnel as long as it is built by Private Sector Funding and not the taxpayer.

Whitehall Mandarins have had enough of Private Sector Landlords (PSL) who exert too high an influence on housing strategy.

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Blog: PEARL – A PRS powerhouse

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Its work has made the front page of The Times and has even persuaded a global enterprise to change its operating policy. That is the power of good research. Here RLA Chairman Alan Ward reflects on the first 12 months of RLA research lab PEARL. Research has always been a key part of our work […]

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Reinstatement insurance valuation every 2 years?

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Please can anyone tell me the min time period that the freeholder can legitimately carry out insurance reinstatement valuations for the building?

We have been hit with a £1600 bill in 2016 for this and then again in 2018 for £1800!

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Letting Out Annex via Airbnb?

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I recently purchased a converted barn, which has a two bedroom adjoining annex with internal access via the main house plus its own front door, kitchen and bathroom. I pay one council tax bill for the property as a whole.

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Agent jailed for spending £700,000 of his landlords’ money

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Fraud & economic crime:

The Crown Prosecution Service has reported on its website that last week a property agent was sentenced to five years in prison for spending £700,000 in rent he had collected on behalf of his landlord clients.

Jeffrey Gadsden, 60, who ran Walkers Professional Property Services in Brentwood, Essex had collected the rent and service charges on behalf of landlords, the company’s landlord clients, involving more than 150 properties across the east of England.

The funds were kept correctly in client accounts, with rent normally sent to the property owners on a regular basis, but the money in question never reached its rightful destinations, Snaresbrook Crown Court was told.

In June 2013 the business ran into financial difficulties and Gadsden began spending his clients’ money on the day-to-day running of his business to keep it afloat.

When some of his landlord victims attended Gadsden’s company offices to collect their money, they found the offices were closed down and the business had gone into liquidation.

Gadsden received five years in prison for the first count of fraud and four years in prison for the remaining seven counts to run concurrently.

Stephen Rowland, from the CPS, said:

“Jeffrey Gadsden was trusted by his clients to collect the money received in rent on their properties and properly look after funds collected for building work.

“Instead he used this money to keep his business afloat, leaving them thousands of pounds out of pocket.

“Gadsden denied fraud but the CPS presented evidence including client accounts analysed by a financial accountant that showed he had stolen money from each victim.�

Choosing a good agent

Choosing a reputable letting agent is a vital part of running a successful landlording business. Landlords commonly fail to properly vet their letting agents or keep an eye on how the agent’s business is being run. Reputable agents are members of a proper professional association, including a dispute resolution service. They will soon be require to have an insurance backed client money protection (CMP) scheme in place.

Finding a Good Agent

Client Money Protection

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