Communities and Local Government has told Estate Agent Today that it is satisfied with the “consistently high” performance of all three of the approved tenancy deposit schemes.
CLG has also confirmed that it is happy with the way the tenancy deposit legislation is working, saying it has had a positive impact.
Yesterday afternoon, EAT finally received answers to questions that we first filed by email two months ago – at the end of November, again in December, and a third time last week.
We asked if CLG was happy with the performance of all three schemes, decisions to take adjudication of disputes in-house and the raising of subscriptions by the Tenancy Deposit Scheme.
CLG replied: “The level of fees charged is a commercial decision for TDS and not one Government would seek to influence.
“CLG closely monitors the performance of each of these schemes and is satisfied with the performance of all three. Over the two years that the schemes have been operating, performance has been consistently high, with targets regularly being exceeded.”
Asked if CLG would renew the contracts of all three schemes, given failures to meet Key Performance Indicators, we were told:
“The existing scheme providers’ contracts are due to run until March 2012.
“We do not have a timetable for the re-tendering process yet. When we do, the existing providers as well as new companies will be able to tender.”
CLG also told us that it is satisfied with the independence of the dispute resolution services operated by the schemes.
We also asked CLG if it was concerned about letting agents which have misappropriated tenants’ deposits, leaving landlords to face the legal and financial consequences. We asked if this was really how it was envisaged that the legislation would work. We also asked if new regulations would be brought in to insist that all letting agents have ring-fenced client accounts.
CLG replied: “Tenancy deposit protection legislation was set up primarily to protect the tenant and ensure that they get their deposit back when they are entitled to it.
“At the end of the tenancy, if the agent used by the landlord has misappropriated the money, the landlord is still legally responsible for the return of the deposit whether or not they have managed to retrieve it from the agent.
“There is always a commercial risk when using an agent and we would advise anybody using a letting agent to check whether they have client money protection insurance or whether they belong to a trade body or accreditation scheme.
“Agents belonging to the Association of Residential Letting Agents, the National Association of Estate Agents, the National Approved Letting Scheme or the Royal Institution of Chartered Surveyors, for example, are bonded, which means that the money paid to them is insured against theft and fraud and they have redress schemes if anything goes wrong.
“We are clear that the lettings industry should offer a professional service to both landlords and tenants and it is wrong that letting agents can currently set up in business without any qualifications or expertise.
“Following an independent review of the private rented sector, we have consulted on the introduction of a system of compulsory regulation for all letting and managing agents to raise standards in the industry and give landlords and tenants confidence in the service they receive from agents.
“We will respond to this consultation in due course.”
We also invited CLG to make any other comment it wished.
CLG replied: “The tenancy deposit protection measures have had a positive impact overall. In the first two years of the scheme over 1.5 million deposits totalling over £1.4 billion were protected.”