Tenancy deposit law is working, claims landlords asso...

Tenancy deposit protection legislation is working, the National Landlords Association has said.

It made the claim as yesterday a board meeting of the Tenancy Deposit Scheme discussed its huge price hikes and the ensuing furore among agents.

This morning, it was announced that the new flat rate for NFoPP and RICS firms per tenancy is to be £15. However, the average charge per tenancy through the TDS will be £11.22, as discounts will be retained for firms that have made only limited use of the scheme. Some 300 firms will be notified that their subscriptions are reduced.

Furthermore, all subscriptions for the second half of 2010/11 will be re-calculated in July, on the basis of the number of live tenancies registered at the time.

Meanwhile, the NLA's claim is likely to prove controversial among other landlord organisations, including the Residential Landlords Association which has consistently campaigned against the legislation, and is to fight at least one court case on behalf of an aggrieved landlord this spring.

The NLA has its own scheme, Mydeposits, which is a competitor to the TDS.

However, in the statement by the NLA, it did not mention Mydeposits. Instead, it focused only on concerns about the TDS price increases and the possible effect on landlords. The NLA has some 20,000 members.

David Salusbury, NLA chairman, said: “The NLA believes we need to be careful not to let the current discussions about TDS price increases detract from the principal purpose of tenancy deposit protection: offering legal protection for tenants where, in the small number of cases, landlords wrongly withhold all or part of their deposit.

“The NLA welcomes recent comments from the Government that it is happy with the performance and high standards demonstrated by the approved tenancy deposit protection schemes. All in all, tenancy deposit protection legislation has proven to be a success and current issues must not alter this message.”

He added: “I have written to TDS seeking clarification about the likely impact of their price increases on landlords and the NLA will communicate their response in due course.

“It is quite clear that landlords should not be expected to foot the bill of these price increases and we will be monitoring the situation carefully. For the NLA, the interests of landlords must be safeguarded.”

Both TDS and Mydeposits are insurance-backed schemes which allow agents (and landlords) to hold on to deposits provided they have been insured. The third government-approved scheme, the Deposit Protection Service, does not rely on insurance but provides a physical banking service for the actual money.