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Written by rosalind renshaw

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.”


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    Base Rate 0.5%, TDS subs and Costs of audit etc? TDS 0 DPS 10

    • 29 January 2010 12:25 PM
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    Pee Bee - not only the same government, but the same department.

    • 28 January 2010 06:39 AM
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    ...CLG replied: “The level of fees charged is a commercial decision for TDS and not one Government would seek to influence". That would be the same Government who launched an enquiry into Estate Agents' fees, wouldn't it...?

    • 27 January 2010 16:54 PM
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    What a mess poor old Blighty has become.Instead of whingeing about an insurance scheme one is free to change.
    We are an indepedant firm who have been trading many years. It is an imoertinance of those who probably have avested interest to say only those who belong to a trade gruping are the only ones with whom the public can trade.
    The UK real estate business is a mess. It needs to be licenced.Mess up and you lose your business!!

    • 27 January 2010 16:16 PM
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    You should have been a script writer for Yes minister - excellent stuff. Well said.

    • 27 January 2010 13:45 PM
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    Have I gone totally mad? For those old enough, this is more like a Brian Rix farce. The plot is thus:- As a ‘not for profit’ organisation, TDS Ltd reports profits after one year 2007 – 08 of £1.9m. Then, by its own admission, nearly two years later it publicly confesses that it has got its business model totally wrong. It acknowledges that an increase in the volume of disputes from a small number of users is now such a major issue, that to solve the problem, it dismisses most of its external adjudicators! It then massively increases the usage / subscription cost, with no consistency or apparent logic but more importantly without any explanation whatsoever, particularly to RICS, NAEA, ARLA, Law Society & NALS who, following rule changes they (TDS Ltd) themselves introduced, are the only organisations permitted to use the scheme (in complete conflict with the ODPM procurement guidelines I might add) - AND THEN, when industry concern reaches a level where an accredited journalist asks for specific comment from the CLG, the very people who, on behalf of the public / electorate, grant TDS Ltd the license to trade, after two months they eventually make comments along the lines that they are “entirely happy” with its performance, imply that it has provided “a consistently high performance”, that ”targets are regularly exceeded” and that it would be “improper for them to influence the cost” etc etc. - Mr Denham, as the “here today (and on this performance) gone tomorrow” politician, responsible for this shambles,-if your PR agency pick this up - can I be impertinent enough to suggest that you address the issues raised as a matter of urgency and that your department compel TDS Ltd to provide a full explanation for their actions and secure a commitment that this scheme will operate on a transparent basis in future, if it is able to continue. You are Sir, my most obedient servant.

    • 27 January 2010 11:31 AM
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    As I have been saying too much egg to go over too many faces for anyone to admit anything is wrong. The 2 year extension ws granted April 2009 and there is also a little know provision to extend for a further 12 months but that has to be 'enacted' by June. Given there is an election I'd say it is bound to be, so the thrtee schemes will be licensed until April 2013

    • 27 January 2010 10:44 AM
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    How typical of CLG to foist a 'solution' on the market - all in the interest of the god-like consumer of course - and then wash their hands of any responsibility for the ensuing debacle. Remind you of anything... like HIPs for example?

    • 27 January 2010 10:35 AM
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    What a 'non-answer' from CLG! and just what is meant by 'There is always a commercial risk when using an agent.....'

    • 27 January 2010 10:22 AM
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