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Written by rosalind renshaw

Mydeposits has criticised its competitor, The Dispute Service, for raising its prices 23% and has said it will freeze its own.

Eddie Hooker, chief executive of mydeposits, which like TDS is an insurance-backed scheme, said: “Landlord users of mydeposits are already benefiting from a VAT price freeze at 2009 levels. I can now reassure the vast bulk of our agent users that we have no plans for any price rises during 2010.

“We think this is the least we can do to support the private rented sector as it emerges from a very difficult and volatile period.”

Hooker’s own scheme has a pay-as-you-go charging model. He said that this week’s announcement by TDS of its new charges – a minimum annual subscription set at £750, with some agents having their subscriptions ‘loaded’ – had “raised eyebrows across the sector”.

He said: “I believe this new two-fee instalment model, with the second instalment linked to the number of agent protections requiring Alternative Dispute Resolution (ADR), should be approached with care.

 “Last year’s TDS decision to only accept ‘accredited’ agents was intended to reduce the risk and cost of protecting deposits. Their announcement on Monday of a hefty price increase suggests this approach is not working.

 “Letting agents are likely to be frustrated as they can expect further price increases if they are unlucky enough to experience more disputes. This could be the first step along the road to charging for ADR.”

Since last January, TDS will only accept letting agents who are members of ARLA, NALS, NAEA or RICS, saying that this was on the insistence of their insurers.

Mydeposits was set up by the National Landlords Association and was designed primarily for landlords. However, it does also accept agents and does not insist that they belong to a membership body or scheme.

Comments

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    A petition has just launched on 10 Downing Street website demanding that The Dispute Service Ltd publish a clear and concise calculation of their subscription formula on their website. Unfortunately I can't copy the link here but please go to www dot petitions dot number10 dot gov dot uk forward slash TDSsubscriptions and sign the petition.

    • 26 January 2010 12:41 PM
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    Hi Ellie, Many thanks for your last, last posting on the subject. My understanding of your assurances, are that in ALL cases the tenants funds are fully protected, without exception, which is the whole purpose of TDP legislation. After all, it is the landlords 'commercial' decision to appoint an agent. However, from a purists insurance perspective, I do stand by the principle of my original comment because, given the obvious subrogation opportunities against the perpetrators in all cases where disputed or misappropriated funds have not been remitted by the landlord or agent as your TDP scheme demands, the insurance 'risk' is minimal and the premium would presumably reflect that. Thanks for your e mail address - I might follow that up if I may. It was unfortunate about the Scottish misunderstanding.

    • 26 January 2010 12:38 PM
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    Hi Laurie, thanks for pointing me in the right direction! I finally found the document. This is not a document mydeposits provided for the Scottish Government, but actually evidence/minutes taken from the working group meeting which mydeposits attended. What is written is exactly as you said, the Scottish Gov’s ‘interpretation’ of evidence mydeposits gave. Unfortunately the way para 107 is written is not clear, and does not explain who it refers to (landlord or tenant or both). So, to clarify this statement: “Mydeposits advised us [Scottish Government] that where a criminal offence has been committed, such as misappropriation of client monies by an agent, the insurers would not cover the deposit” In reference to landlords this is correct, just as it is with the existing scheme in England and Wales. However, it is incorrect with reference to tenants. Mydeposits insurance DOES cover tenants in these situations – and they have 90 days after the tenancy ends to raise a dispute with mydeposits (in order to have mydeposits claim on their insurance and pass the money on to the tenant). mydeposits will then seek remuneration from the landlord. This has always been the case (and has been explained previously on EAT) and is clearly stated in the scheme rules. Anyone interested in seeing the scheme rules in more detail can find them in full on the mydeposits website. Mydeposits is also writing to landlord clients of agents using the scheme to remind them of their ultimate responsibility in law for the tenant’s deposit (even if their agent protects the deposit) and explaining that they will be liable for the return of the deposit if their agent misappropriates money, or acts fraudulently. I think I’m allowed to put my email on here (?), so any further questions can be directed me at ellie.irwin@mydeposits.co.uk Thanks.

    • 25 January 2010 17:50 PM
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    Hi Ellie - are you going to do one last 'post' for us and answer the questions, otherwise we will have to assume that the Scottish Government web site is correct?

    • 25 January 2010 11:59 AM
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    Summary of how I see things now for my company

    Disgruntled – I think you’ll find OFT will not be interested as they only deal with business to consumer contracts (Landlord/agent to tenant) and not business to business (Agent and TDS Ltd or even maybe Agent and Landlord depending on whether Landlords is classed as a business).

    Will – forget Mydeposits even with discount transferring your deposits to them will cost you over £65K!!!

    Nicki and whoever wanted to launch petitions, march on TDS Ltd HO and otherwise man barricades – forget it. Too many mistakes have been made from CLG and Scheme organisers and it took 10 years to get the TDP regulations on the Statute book in the first place. Anyone wanting direct action NOW needs to write to TDS Ltd and demand a detailed breakdown of their specific renewal quote.

    Second keep powder dry and then make sure, if TDS Ltd is still in business when the review and re-awarding of contracts comes up mid 2011 (which I very much doubt) then make sure you respond to any consultation by CLG.

    Everyone – check TDS Ltd rules in GREAT DETAIL. There are some interesting hidden nasties in there. Those posting with names and sticking heads above the parapet – be careful there is also a rule on unprofessional conduct which knowing TDS Ltd........................

    Jason – same comment for you. Read the rules about what happens if an agent does cease membership you HAVE to arrange cover elsewhere as otherwise for as long as you have not you pay all and any costs of TDS Ltd disputes.

    John – you didn’t quite post the whole story when quoting TDS Ltd saying it is OK to charge tenants. It was a definite no-no originally and the rule you now quote is there but, and it is a big but, it says to consult your “professional body”. I suggest anyone thinking of charging tenants for anything to do in connection with TDP regulations consults ARLA and NALS before doing so. I'll be amazed if they say it is OK for a member to recover any part of the costs from the tenant.

    Ellie – as with the other schemes (and indeed all insurance) you cannot go wrong. Even if you do have to make a payment to the tenant because of agent default you recover from the Landlord.

    Robin – it’s not £900 per dispute it is around £250 max but TDS Ltd needs the increased fees to survive and fill the black hole that used to be ‘profit’. Interesting they claim to be non profit making as that means self-financing as per Custodial.


    An Agent – in one sense you are right but you too should consult the rules (same for all 3 schemes probably) for who can refer a dispute and when. Agents could bend over backwards and still ends up with a dispute because the tenant refers it. There is no need for Landlord/agent agreement, the tenant can just go solo. The only way to deflect this is to refuse the referral – when TDS Ltd contact you and say there is a dispute and you have 10 days to send them the money just tell them the Landlord is not prepared to use ADR. Then the tenant has to go to Court. This assumes of course the Landlord has a genuine strong case and you agree with him.

    Robin Burnage – you are dead right. My company has started adopting this strategy and the number of disputes that would otherwise have gone to TDS Ltd and as it happens have generated an absurd renewal fee have, thank goodness, dropped off dramatically. Needless to say the number of tenants who actually go to Court is also minimal if any. Then you bang heads together and once the tenant realises the soft option has been taken away from them, if they want any of their money back they re-negotiate. Course this means the Landlord is frozen out from the money too – but then what is likely to happen if it goes for a TDS Ltd adjudication? You are also dead right about who initiates the dispute in 90%+ of cases. But try telling that to TDS Ltd.

    Gareth Davies – I agree but TPO has no power to make financial awards.

    Take a deep breath, read the rules in great detail and then decide in the cold grey light of another week whether initial reaction last week is the correct one. Assuming you have any choice with such silly fees. I have tried looking every which way and still cannot work any formula beyond the basic £6 per tenancy for ARLA members and no disputes. The other thing to consider is even if prepared to pay TDS Ltd fees are you prepared to stay with an organisation so hopelessly out of control of its finances? Either TDS Ltd is just totally out of touch with reality or, more seriously and likely, is in such deep financial trouble it has to charge these fees even if it means members going elsewhere. Which leaves the problem for the good guys left behind with no disputes – how long do you think the fee will stay at £750 when TDS Ltd has such drastically reduced income but the same fixed costs?

    Members of other schemes beware – I’d read your rules and consider how you think an influx of new members with a track record of disputes might affect your scheme and its future fees. The big thing in this context for TDS Ltd members who stay to fear is the second invoice – I’ll be extremely surprised if they all end up staying at the other 50% of the original total.

    • 25 January 2010 09:04 AM
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    Has anyone yet registered a complaint with the OFT?

    • 22 January 2010 13:45 PM
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    I am launching a petition on the 10 Downing Street website and would urge everybody to sign it. As I can't type a link to it on this site, this is what the petition is asking:
    "We the undersigned, petition the Prime Minister to demand that The Dispute Service Ltd publish its formula for calculation of subscription rates on its website. The Dispute Service (TDS) is one of three schemes set up, and chosen by the Government, to protect tenants deposits. The tenant deposit protection scheme came into effect two years ago. TDS are now demanding unsubstantiated and excessive subscription costs from their agent members and there is no parity between them. TDS subscriptions are now extortionate and there is outrage throughout the industry. TDS should be made to publish their formula for subscription calculation on their website in a clear and concise manner." I will hear back in approximately 3 days as to whether they will publish this petition. The petition name is TDSsubscriptions so either please keep checking the 10 Downing Street Petitions website to see if its been published. Alternatively feel free to email me at nicki@wsbgroup.com and I will send you an email to let you know when the petition is available to sign.

    • 22 January 2010 10:48 AM
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    Beat this - 3500 managed properties, 8 branches,ARLA members, 47 disputes last year, TDS renewal fee £72,000 + vat!!!That'll cost me £1500 per dispute! Goodbye TDS......anyone got the number for mydeposits?

    • 22 January 2010 09:46 AM
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    I back Industry Observer's comments about not being allowed to pass on any TDP costs to Tenants. It was absolutely prohibited in the TDS Rules. That having been said, TDS have recently amended their Rules and I wonder whether they have changed their stance on this. It would certainly make life a little easier if they have. I too shall be re-reading their Rules over the next few days.

    • 21 January 2010 20:28 PM
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    Ellie,and just when I thought it was all over:) This site will not allow me to put in a link so look at Topics > Built Environment > Housing > Private Renting > Evidence Paper June on the Scottish Government site - page 19 - para 107. As you will see,there is no context, simply a statement of fact, presumably related to their apparent interpretation of your submission. So can you do one more encore and explain in what circumstances a tenant would not be indemnified by mydeposits where a scheme user of yours (landlord or agent) had misappropriated the funds – where does the 90 day rule impact in this scenario?

    • 21 January 2010 19:01 PM
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    Hi Laurie, back just for you! From my post at 22.04 yesterday you quote me but miss off part of what I actually said, which is the key part, "We do cover losses arising from agent fraud and misappropriation - but to the tenant only."

    So to clarify, mydeposits does cover misappropriation of deposits by agents but ONLY reimburses the tenant and NOT the landlord. As the landlord is responsible for the deposit by default, mydeposits or its insurers will look for recovery of any outlay from the landlord. mydeposits will only honour the deposit guarantee to the tenant at the end of their tenancy agreement or 90 days, which ever is the shorter. This is all set out in the scheme rules (sorry to bang on!).

    I've hunted around on the Scotland Gov's website and I can't find the text you refer to. Do you have a link? that would really help. Without seeing what was written in full (rather than just one sentence) I don't know the full context of this quote and who (e.g landlord, or tenant) it refers to. For example if it refers to tenants then it is incorrect “Mydeposits advised us (Scottish Government) that where a criminal offence has been committed, such as misappropriation of client monies by an agent, the insurers would not cover the deposit”. However, if the context is about landlords and whether they are covered by the insurance then that’s correct, just as it is with the existing scheme in England and Wales. Mydeposits would operate its business in Scotland just as in England & Wales. I hope this clarifies things. And that folks, really is all from me...! If you have any really pressing questions you can find my contact details on the mydeposits website and give me a call, or send me a mail. I'm happy to have a chat.

    • 21 January 2010 17:18 PM
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    John as far as I am aware TDS scheme rules prohibit it and I will further check this out and if wrong gladly confess. They are changing their rules and what you quote may be long standing but I am 100% certain at one point they clearly prohibited charging the tenant anything. The soirit of TDP for certain is that it is free for the tenant whose deposit is being protected. I would suggest the OFT mention at the foot of your quote is as good as a nod to a blind man that charging tenants overtly at least i.e. other than simply increasing the tenant's application fee, might be frowned upon if challenged but we’ll see.
    Mydeposits were not averse to charging tenants but then notwithstanding what Ellie says they are landlord focused and not wanting landlords to have to pay!! The custodial scheme do not prohibit charging tenants either and arguably this could be justified on the basis of the work of deposit registering etc and above all with them at the end of the tenancy, even if no fees are paid to the scheme itself. I agree that DPS can be a real pain at the end of a tenancy especially in absentee scenarios where it should be easy - as they are the only scheme with legal provisions specifically aimed at dealing with such situations!!

    • 21 January 2010 15:29 PM
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    Just one note about not being able to charge TTs, responding to 'Industry Observer' - I quote this from the TDS website;

    "2.3 Can we recharge the subscription?

    Yes. The Housing Act 2004 is silent about recovery of the costs from either landlords (for agents) or tenants. Members are free to re-charge their costs. They may do so on whichever basis most suits their method of operation (TDS D Operational procedures and advice for members, Section A paragraph 2). You are advised to consider the implications of the Unfair Terms in Consumer Contract Regulations in drafting clauses for inclusion in tenancy agreements."

    Seems pretty conclusive to me?

    • 21 January 2010 14:59 PM
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    Sorry one more partly to apologise to Laurie who I named middle of my last posting wehen I meant to say Ellie of course. Just one last glimmer of hope - all the schemes will at least be reviewed and I think will have to re-tender to be awarded an extension of their authority from CLG I believe by end 2011. Assuming that the schemes have indeed survived until then - how Custodial makes anything in the current climate if it is meant to be funded from investing the deposits I will never know. But someone please tell me where they invest (not that I have as much to invest as they do, a sum which in their case I think is shortly set to expand dramatically!!). Mind if their parent who must surely be funding them gets fed up and pulls the plug that's two down. Ellie the deposit world could be yours!!

    • 21 January 2010 14:44 PM
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    Just one more comment for those weighing up the benefits of each scheme. The TDS model charges per tenancy so if you 500 tenancies you would pay £6 - £10 per tenancy - say £5,000 per annum with TDS
    With mydeposits it's per registration - now, out of your 500 properties a good number will have tenancies of one year or less which means that on a good number there will be at least two registrations per year, sometimes more if you are in a market where you have lots of houses with students or sharers that like to move in and out every two minutes. Your total payment then could be 6 or 7 hundred registrations x £18.50. TDS still seems the way to go for me.

    • 21 January 2010 14:33 PM
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    Sorry Ellie, This is about mydeposits climbing on a bandwagon. Eddie Hooker didn’t need to say anything. Even a cursory glance at mydeposits business model, which is seemingly based per tenancy with an assumed claims/dispute incidence factored into the charges, is obviously the soundest, indeed only way of approaching the problem. No one could understand the insurance logic of the TDS Ltd charging concept – original or revised. The fact that your dispute rates (and ADR costs) nearly doubled from 2.15% to 4% between the years 07/08 & 08/09 and your ability to now ‘boast’ of your ability to maintain current charging levels for the next 12 months “to support the private rented sector”, is certainly testimony to your robust financial model. On that point I will say no more. One last comment, in your posting of Wed 20th at 22.04 you stated that “We do cover losses arising from agent fraud and misappropriation” Yet if you refer to the information that mydeposits apparently presented to the Scottish Government, which is published on their web site under the heading “evidence paper” under para 107 (Page 19) it states categorically that: “Mydeposits advised us (Scottish Government) that where a criminal offence has been committed, such as misappropriation of client monies by an agent, the insurers would not cover the deposit”. For the avoidance of doubt, could you or someone at mydeposits confirm which is correct please?

    • 21 January 2010 14:29 PM
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    John I don't know if anyone else has advised this as have only just read your thread but you cannot charge anything to tenants, at all, under TDS Ltd rules. The other two schemes you canin theory at least but I still wouldn't. Phil I agree with every word you say but sadly the legislation will not be changed and the changes would be so common sense as to embarrass so many people originally involved it will never happen!! John I hear what you say but I wonder how long you can remain happy with TDS Ltd because I can only see it going one way. Laurie you have solved the problem for TDS Ltd. They should do what Mydeposits do and throw 33% of the disputes back at the referrer. Brilliant. By the way how many of that one third were from private Landlords who couldn't be bothered to put enough effort into resolving it and just sent it to you? Anyway my parting shot as well as I simply must look to my own offices and steer them. TDP was founded on one of the worst pieces of research ever to be relied on for anything (Unsafe Deposits) never mind actually leading to legislation. As an example one question used to tenants in CAB offices was "Have you ever had any part of your deposit withheld on a tenancy?" Well yes maybe I have - sadly the follow up question did not ask if they deserved it to be withheld!!! As the whole premise behind why the scheme was needed was so badly flawed is anyone really surprised we are where we are. This TDS Ltd fiasco is just the latest stage. Ah well.

    • 21 January 2010 13:59 PM
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    Responding to Laurie's parting comment I am ARLA and will benefit from £6 per deposit registration at this stage. However, I'm surrounded by other ARLA agents who are seeing their costs rise 5 fold in some cases....not surprising since the charging structure is now per registered tenancy.

    As I've said before, TDS need to explain their charges to members otherwise many will leave.

    • 21 January 2010 13:42 PM
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    Industry Observer, I’m the press officer for mydeposits, so I’m just trying to do my job! As you rightly say there is too much focus on mydeposits here, naturally I want to put mydeposits’ view across, but this story is about the TDS decision. After this post I’ll leave you to it, as I think I’ve said all I can on the issue.
    Laurie, I can reassure you that CLG already take a very active interest in all three schemes and mydeposits regularly meets with CLG. No action can be taken without CLG’s say, which very tightly controls the schemes.
    John, you make some very fair points, actually staying put with TDS may well be the best option for some agents. And your comments on DPS are spot on. Mydeposits isn’t trying to stir things up, but instead commenting on a major story from our competitor, which has a huge impact on the industry.
    Thanks to everyone who’s participated in this debate, it’s made very interesting reading - it’s important for mydeposits to see what people in the industry are saying.

    • 21 January 2010 13:04 PM
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    To Industry Observer – Since the restriction imposed by TDS Ltd, limiting participation to RICS, ARLA, NAEA, NALS & The Law Society last April - they have never, theoretically had a problem with agent misappropriation / failures as, unlike mydeposits, all participating letting agents then had to be included within the Client Money Protection (CMP)arrangements provided by their respective trade associations. Curiously, indeed perversely, TDS Ltd apparently has direct insurance recovery arrangements in place with RICS, ARLA & NAEA CMP providers. However, for reasons best known to themselves, it is alleged that no such agreement was reached with NALS. So the problems with Martin & Co and possibly other franchise groups, seemingly has arisen when the CMP schemes didn’t respond as they were expected to. Also, let’s be clear about this, the main protagonists of, what became TDS Ltd (formally TDSRA), were RICS & NAEA led by ARLA. They are the founding shareholders in the scheme – in short, despite comments to the contrary, there is nothing ‘arms length’ about this structure. This whole arrangement was originally orchestrated by ARLA for the benefit of its membership. Indeed as originally proposed, at the commencement of ODPM tendering, other than the gang of three, no other organisation was intended to be allowed to participate – including NALS - on whose board the three of them sat - now there's a story. If rumours are true that RICS had to underwrite the TDS Ltd bid to comply with government tendering financial requirements as has recently been reported, there will be a few rather upset Surveyors if TDS Ltd does go down the tubes? As for charges, I wonder how many grateful £6 ers are ARLA rank and file members – after all they wouldn’t want to upset them, would they? I wonder if this will be edited?

    • 21 January 2010 12:35 PM
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    I think the deposit protection legislation & arrangements need a major re-think.

    DPS supposedly fund their scheme through interest on deposits....is this sustainable given current rates of return? Their deposit release processes can also be a nightmare.

    My Deposits charge for initial registration then per tenancy. They also seem to screen landlord and Agent applicants less stringently than TDS for example and will not pay (I believe) where the underlying deposit has been misappropriated.

    TDS assumed that in setting their agent registration requirements at a higher level, the number of claims would be reduced and so too the consequential cost of administering the scheme and ADR. It seems some TDS agents have abused membership and referred countless claims.

    The fact is that each scheme must have the capacity to fund its operation. As an agent I also want to offer my clients (landlords & tenants)the best form of protection and an efficient process. This is why I choose to use TDS and my renewal has been set at the lowest charge of £6 per tenancy since I have avoided disputes.

    I think TDS need to be a lot more transparent about their renewal fee calculations and publicise the % of disputes claims they dismiss as vexatious / without foundation. TDS also clearly feel that some agents have been abusing the process and if this is the case those agents need to pay.

    • 21 January 2010 11:45 AM
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    I've received my bill from TDS and was initially horrified by the amount. However, once the red mist cleared I averaged out the price per tenancy - mine works out to be £6 per tenancy - which, on reflection seems dirt cheap compared to Mydeposits. They charge £23 per deposit plus set up fees. So I accept that it’s an increase from what I was used to, but for me I've no intention of jumping ship. It seems as though Mydeposits are stirring it up a little bit, but I’m not sure they are particularly competitive or have anything better to offer.

    It seems as though we've been getting away with it until now. Generally I feel that TDS works well and I have no gripes with the few disputes I have submitted and feel it is only right that those who have abused the system are charged more. I accept though that others may not quite be in the same position as mentioned on this blog - but see what you're average price per tenancy works out to be, combine the hassle factor of switching and make you're decision from there.

    I don't think DPS is an option - the benefit of holding the deposit is invaluable (not just from interest point of view) but from the convenience. I have some deposits with DPS and I find them very difficult to deal with, particularly where the lead tenant won’t OK the release of the deposit and has gone to ground.

    All criticism aside – do the maths and see if it stacks up – I’m staying put and am recharging the fees to TTs and LLs. In fact, I’m doing it right now to get as much in before 1 April!

    • 21 January 2010 11:20 AM
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    Laurie you make very good points. I would just say though that I think the issues stirred up by Martin & Co specifically and other agant failures and the wider problem of agents no longer members of schemes going bust (and those that are!!) is playing very heavily on TDS' mind in this exercise. Maybe the fact they have sacked almost all their adjudicators and have more admin staff at a very expensive and far too big HO building is an issue too? Can I just confrm that like most people posting I am not in any way involved with any scheme other than as a member. I thought from what I was seeing from renewal fees that the new fee was far more heavily based on tenancy numbers (wrongly in my view) rather than disputes (as it almost entirely should be in my view, make the naughty pay!!) but I have just become aware of another one where, and get this, there are just under 100 tenancies covered and no disputes referred and the premium quoted is................£3500 ex VAT. Can you believe this - it is sheer madness! Can anyone beat this with an even more ridulous renewal demand from TDS Ltd when I have seen another at 65 tenancies and zero disputes and it is £750. The big one is a member of NALS and the small one ARLA. They have more than 100 tenancies of course but less than 100 ASTs. So can ARLA membership be worth that much after all and be so much more valued and rewareded in the reneal fee calculation by TDS Ltd compared to NALS membership? Maybe roots and links as referred to elsewhere by someone and TDS Ltd and TDSRA and ARLA involvement and the bad blood with NALS several years ago are playing a big hand here? After all otherwise how can an extra 35 tenancies cost an additional £2750? on the fee!!! So watch out all none ARLA members of TDS Ltd unless you are RICS or NAEA my guess is your NALS fee isn't helping you offest too much of this increased TDS Ltd fee!! How many of those who have already posted their fees here and are saddled with big increases and with not that many disputes are actually members of NALS only I wonder?

    • 21 January 2010 11:18 AM
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    Interesting, I don’t recall any prescriptive comments in either the pre TDP procurement directives or the enabling legislation regarding how the ‘insured’ schemes should operate i.e. only guaranteeing the tenant. Indeed quite the reverse. By reference to the current directgov web site, the single most important principle, then as now was that; quote ‘if for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it’. There have been increasing numbers of circumstances reported where the operation of a “90 day rule” involving cases of fraud and misappropriation seems to conflict with that fundamental principle. Perhaps you could expand on that?
    As for the ADR costs, since you are not a charity, it is reasonable to assume that the (proportionally significant?) per unit expense for the provision of your ADR function is notionally factored into the charge levied per tenancy. All your comments indicate that your budgeting from the outset of the scheme has been more than adequate to fund the ADR provision. Using Nikki’s example below based on 547 tenancies where you are £1900 more expensive than TDS Ltd, even after their massive pricing increase, can only lead an observer to conclude that, unlike TDS Ltd, you have been generating a significant surplus over the past two and a half years. I would add that I don’t have a problem with that, though if you were to become the only ‘insured’ TDP provider, one can’t help thinking that CLG should take a far more proactive interest of the conduct of the scheme.

    • 21 January 2010 10:33 AM
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    Let's nail another hare before it runs too far and that is 'free' ADR. We are probably focusing too much on MyDeposits and their comments here, and I am guilty of that, when what is needed is how to sort out what is a family affair - the TDS extended family and its costs problem. ADR is free - it has to be by Law - that is free to the users, the Landlord and the Tenant. If some other poor sod stuck in the middle has to pay for it, that is fine. Guess who that is through their Scheme fees except Custodial members who, I hate to keep reminding everyone, get everything the other two schemes provide and free!! Don't lose sight of the much bigger picture because of silly reneal fees now being demanded. TDS Ltd will probably have to backtrack or pack up anyway. Think about the future - the ongoing tenancies that have to be paid for each year simply because they are still there anyway is a very good point someone made. Think about what if your business expands by acquisition and you have 100 or more properties next year - even with no disputes on figures now appearing yourr TDS Ltd fee will increase by another £1000 minimum and for what - because you are succesful and run a good business!!. And what if some of those have a chequered history deposit-wise? This two invoice system - what happens if TDS Ltd is in an even worse financial pickle come September - is the second invoice still going to just be the other 50% of what has been quoted now even if you have no more tenancies (unlikely) and no further disputes? The suggestion to charge Landlords is all well and good too but how do you introduce it for existing ones never mind new ones in a competitive business where the client is very concerned about costs in three respects - voids, maintenance and agent fees. How do you recover your costs from the Landlord when you could protect the deposit for free? What about the fact TDS Ltd is extremely unlikely now to ever recruit any new members because of their swingeing costs added to the previous costs of being a regulated agent to join anyway? Small and new agents may until now have gone Custodial or Mydeposits until they were big enough and wanted to apply for ARLA or NALS and then go TDS Ltd if they felt that scheme was more appropriate and had more kudos for a regulated agent(!!) But not any more they won't. So how do those who do renew with TDS Ltd feel about being members of what is going to at best almost certainly be a club with a static and in all probability a dwindling membership. What happens when a finite membership has to fund a club with increasing costs? These are just some of the wider issues not whether Mydeposits doesn't increase its fees this year. If they don't watch how much they go up in 2011 to make up for it!!!

    • 21 January 2010 10:32 AM
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    We've had a 400% rise in fees. Although looking at what some are being asked to pay is insane. From £500 odd to £2400 with 1 dispute.

    Oh, well. Another cost to the landlord/taxman

    • 21 January 2010 10:09 AM
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    Oh dear Day 2 and no better. Ellie Mydeposits does exist primarily for Landlords it always did. Just as TDS Ltd existed primarily - indeed now exlusively - for regulated agents. DPS exists for everyone who wants a free service including overseas Landlords especially. Only one scheme was ever needed - Custodial - and it was only because of lobbying by and for vested interests that the other two schemes were authorised. One mainly for agents and the other mainly for private Landlords. Otherwise if there is a scheme everyone can use no matter who they are or where they live why are two other schemes needed at all?!! I am intrigued by this insurance and what is or is not covered and what is paid out to whom and when given the recent debate about Martin & Co agents and whether anyone is covered if the agent has ceased to be in membership of a scheme. This of course is an extremely current issue for those TDS Ltd agents facing swingeing increases and considering their options. The Landlord always has the liability to the tenant no matter who is holding the deposit and no matter what protection is in place, TDP scheme or deposit insurance policy etc. So are you saying the Landlord pays the tenant and then you reimburse the Landlord? You do this if an agent has ceased to be a member as well do you - as the insurance is still in place if paid for? Incidentally out of curiosity what is your position and responsibility within Mydeposits as you seem to have become the spokesperson for them , official or otherwise, which is fair enough.

    • 21 January 2010 09:24 AM
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    Laurie, just wanted to make a few points in response to your comment “Brilliant actually, no one quite knows what, if anything, they actually insure – certainly not losses arising from agent fraud or misappropriation - and their charges (as now with TDS Ltd) would appear to be directly related to cost of the ADR provision, which CLG advise the Public is .... free under all TDP schemes.” Firstly, I would like to explain how mydeposits insurance actually works. It is mydeposits that is insured to cover their liability against paying a deposit to a tenant (if they are due it). Mydeposits do not insure the individual deposit – instead the insurance provides a guarantee to the tenant. We do cover losses arising from agent fraud and misappropriation - but to the tenant only. As has been clearly stated, and in accordance with the legislation, mydeposits have no obligation to the landlord.
    Secondly, you are incorrect when you say mydeposits charges appear to be related to the cost of ADR. mydeposits prices are NOT linked to ADR. We do not increase or decrease prices for members depending on ADR volumes. Our pricing is linked to volumes of deposits protected, the higher the number the less the agent pays (economies of scale), whether an agent is accredited, and the perceived risk that that agent may or may not go out of business (where we will have to submit more claims to our insurers) dependent on credit checking with Experian – this is all clearly set out in the Scheme Rules and on the ‘agents’ section of the mydeposits website. ADR remains free of charge regardless of the price set for individual protections.

    The reality is that mydeposits prices have remained constant over the past three years. In fact for ‘accredited’ agents, no agent has experienced a price increase at all since tenancy deposit protection was introduced. mydeposits have always published its fees for accredited agents on the mydeposits website, so at least agents currently using TDS know where they stand and can make an informed decision about what are the right steps to take next, be that with us, using DPS, or having the landlord protect the deposit themselves.

    • 20 January 2010 22:04 PM
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    I'd take this debate further and suggest that this is an appropriate time for agents to also reconsider their ARLA membership cost as well. After all ARLA have been instrumental in all of this and yet again has not considered members interests in imposing crippling increases at very short notice with only 2 alternative options available.
    There are plenty of other representation bodies for letting agents, most of whom offer just as much to their members as ARLA do. And don't forget that ultimately the client doesn't seem to care - they're only interested in 2 things - rent and fees.

    • 20 January 2010 17:14 PM
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    I read this the same way as Nicky Marshall - I have plenty of tenancies where the tenants have stayed for five years or more and it seems to me that in these cases we get charged again and again and again. As Peter says below this is the charging method that brought Foxtons to court. Charging renewal fees each year for doing nothing

    • 20 January 2010 16:38 PM
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    Up until recently we didn't charge our landlord clients for registering deposits but we were earning £3,500 - £4,000 per month in interest on the clients account. As rates dropped that interest payment dwindled to a couple of hundred per month and we introduced a £30 registration charge to landlords to compensate. Not one landlord has complained so that is the answer everyone. Ensure the success of this "free" scheme by driving up the price to your customers

    • 20 January 2010 16:08 PM
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    Thank you to Laurie and Industry Observer for your comments - taken on board.

    Just thinking out loud here... TDS say they base their subscription on the number of tenancies registered at a certain date. They dont say whether they mean new tenancy registrations. If they are basing it on total number of tenancies this would surely mean that if I registered a tenancy 2 years ago I would, in effect, be paying for it for a 3rd time this year via increased subscriptions based on a larger number of registrations? Something's not right here!

    • 20 January 2010 15:20 PM
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    Industry Observer, it certainly isn’t mydeposits intention to come across as smug (and I apologise if it comes across like that) but the fact is that TDS has increased prices dramatically and is bringing all adjudication in-house. In contrast, mydeposits is freezing prices and continuing with external, impartial adjudicators.
    Of course it is entirely up to agents which scheme they use, and we aren’t suggesting mydeposits as the answer for everyone, but we are an alternative option. I should clarify though, mydeposits exists for landlords AND agents. Not primarily for landlords.
    You also mention the ‘silly disputes’ referred to TDS, well, mydeposits looks into all claims, and removes vexatious claims, as well as advising the tenant to go back to their landlord/letting agent to try and resolve the dispute between themselves. This is why out of 7,256 disputes raised with mydeposits, only 2,467 actually go through to formal adjudication*. That means that just 0.61 per cent of tenancies protected by mydeposits ended up with the need for formal dispute resolution.
    No one wants TDS to go to the wall because of the impact on the sector as a whole. However, mydeposits business model has proven to be robust. That isn’t changing.
    *Total number of disputes raised with mydeposits after 30 months of tenancy deposit protection.

    • 20 January 2010 14:54 PM
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    Sorry Nikki forgot to say forget OFT. I assume you are thinking something along UCT lines? THis does not apply business to business only to contracts between individual consumers and businesses. Hence why the OFT can murder you on chages etc to tenants (or Landlords) that is considers unfair, but cannot help in this instance. Sorry!! From the figures coming out it looks as though disputes play a very minor part in the new fee calculation and it is really all about deposit numbers insured and fears that higher numbers will lead to more disputes. This may or may not be correct but it means that TDS Ltd and Mydeposits are now run on the same basis - Pay as you Go per tenancy except on a crude initial calculation TDS Ltd seems to be about £100 a go. Out of curiosity anyone know what Countrywide's total renewal fee is. Last I heard they were claiming 80,000 tenancies - ouch!!!

    • 20 January 2010 14:53 PM
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    Have I missed something Nikki? Your cost of compliance with the provisions of the Housing Act 2004 with TDS Ltd - usage based on 547 tenancies will apparently cost circa £8,369 – or, if you move to mydeposits you would be charged 547 x £18.80 (inc 200+ volume discount) = £10,283.60 plus an annual ‘membership’ fee. Though to be fair, the cost is for the duration of a tenancy, so the comparison is not strictly accurate. In any event, Michael Osborne (below) is right “mydeposits have a good business model” Brilliant actually, no one quite knows what, if anything, they actually insure – certainly not losses arising from agent fraud or misappropriation - and their charges (as now with TDS Ltd) would appear to be directly related to cost of the ADR provision, which CLG advise the Public is .... free under all TDP schemes.

    In any event, at those volumes it is most comforting to know that Eddie Hooker is charitably maintaining his current charging levels to ’support the private rented sector’ - how kind;) For those without the maths background even after your 73% increase in TDS Ltd charges, mydeposits are still over £1900 more expensive – now that is a good business model and what is more, endorsed and supported by – the government.

    Of course, you could easily bypass the Office of Fair Trading (OFT) and transfer all your deposits into the DPS custodial scheme and pay ....... NOTHING.

    • 20 January 2010 14:45 PM
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    Jason you are of course dead right and the figures have to be calculated. But no way can they be recovered from existing landlords I'd suggest. Therefore go Custodial. But here is another issue to consider.

    Supposing you do an acquisition this year and bolt on another say 50 properties to your business. You'll have to re-register the deposits if they are passed over to you because now you have handled the money (in all probablility even if held with TDS Ltd already) but either way it doesn't matter because those 50 are now on your books. So your premium increases. In fact as with PI if there is a marked increase in business volume you should actually volunteer the information mid year - would you do that and risk the inevitable fee increase if it happens before your second instalment invoice is settled? The words "Hostage to Fortune" spring to mind.

    • 20 January 2010 13:47 PM
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    Just had my renewal bill from the TDS and yes it's gone up. My rental department manages about 100 properties - so small in comparison to some of the guys who are up in arms. Thankfully I've not had any disputes to deal with so can't comment on how much that affects the charing structure.
    Time for a change? HOWEVER - been on mydeposits.co.uk and just worked out what it would cost me per ann (all figs inc. vat). I do approx 6 new tenancies a month = £141.00 per month x 12 = £1692 - with the 20% upfront purchase discount (look on their website to see what I mean) this takes it down to £1521.62 + £117.50 joining fee - total for 1st year = £1639.12

    For 'Letting Agent' with 350 new lets a year the figure per ann would be £6697.50

    I don't know if mydeposits.co.uk then charge for a dispute to be handled. So that would also have to be considered.

    I'm sticking with the TDS, my advice would be work out the costs before you change.

    • 20 January 2010 13:39 PM
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    Oh dear here we go again why does no-one think before they speak these days? For example Eddie Hooker - no fee increases this year? Very generous considering how many agents - agents mark you who the agent specialist scheme has trouble satisfying - are going to join My deposits and even if they don't re-register all existing deposits will use Mydeposits from now on. How many new risks is that and how many more disputes? Also no need for smugness from a scheme that exists primarily for pirvate landlords who are the bulk of the problem in deposit issues - just re-visit the scandalous Unsafe Deposits report which brought us all to where we are now if you don't believe me.

    Ellie Irwin I suggest you have a chat with your boss and double check if he has thought through the implications for your organisation if TDS Ltd falls down - believe me, not good!!

    Michael Osborn alsoextols the virtues of My deposits. Trust me I have had extensive involvement with all three schemes and they are all as inefficient as each other and above all each has an identical ability to reach ludicrous decisions in adjudications. Just have a look at the article in the latest Letting Update Journal if you want to see a classic example of self-justification for reaching silly conclusions. No scheme has a good business model. DPS and Custodial will be where many agents now go (as they should have opriginally)and that will in turn weigh down another allegedly self funding organisation with costs it cannot bear. My prediction is that TDS Ltd will go to the wall within two years, probably much less, and the other two schemes will struggle to survive until the ludicrous benefits the TDP legislation conferred on tenants are taken away.

    Two other things to watch for. Thre number of tenancies that start getting granted on full Assured Tenancy terms if Ground 1(a) can be relied upon for future possession (just as solid as an AST) and above all watch the purveyors of the no depoist insurance policies (most of which are unsatifactory alternatives anyway)come hurtling out of the woodwork to peddle their wares again.

    Everyone is rightly crying "foul" and asking where the fairness is. Have TDS Ltd actually differentiated between silly disputes referred by tenants with nothing to lose, and also cases where the agent has tried everything to get the Landlord to settle, but they refused? How many cases of those being quoted were actually the agent's 'fault' in that they did little if anything to try and avoid a referral. Seems to me TDS Ltd is basing its model now on the famous minimum claim of £4.50 or whatever it was, and a ludicrous extrapolation that higher numbers of tenancies must inevitable lead to higher numbers of disputes from the same agent.

    • 20 January 2010 13:33 PM
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    We have 4 branches with 547 tenancies registered and 6 disputes referred. Our subscription has gone up from £4830 to £8,369, an increase of 73%. Its criminal. We need to lobby the TDS and I do wonder whether we could get the OFT to look into this? Any views?

    • 20 January 2010 12:57 PM
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    But My deposits charge £ 20 + vat for each registration.
    Transferring existing deposits to the scheme will incur a cost that will be difficult to pass on to tenants or landlords (400 deposits = £ 8k).
    As has been said before, why are the schemes truly pay as you go and you pay an annual membership charge followed by a surcharge if/when there is a dispute ?

    • 20 January 2010 12:09 PM
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    Completely unjustified and blatant exploitation. We have a small office, have raised 4 disputes ever and are landed with a £5000 bill to pay for TDS's servers by the look of it. End of the road.

    • 20 January 2010 12:01 PM
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    These are shocking price rises, way beyond expectations. Forgive me for a bit of brazen advertsing here *ducks* but mydeposits prices remain frozen, you know...

    • 20 January 2010 11:57 AM
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    Charging each year for doing nothing? Are the TDS board in any way connected to Foxtons? Seems to be the same business model and I thought that had been ruled unfair. Graham is right - we are all being ripped off.

    • 20 January 2010 11:51 AM
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    Ditto to Darren, North London - had our renewal notice this moring 450 deposits held 6 disputes and proposed increase from £ 1,200 to £ 6,700 pa. Reading the TDS press last week I was expecting perhaps a rise to around £ 750. Given that there are only 3 statutory schemes this is blatent exploitation.
    As to the comments re. what ARLA will do - I suspect nothing, as they were instrumentel in establishing TDSRA and TDS in the first place - too many vested interests??
    They would be better off putting our ARLA membership into establishing a proper deposit dsupte scheme rather than fritter it away on a piss poor propertylive website!

    • 20 January 2010 11:33 AM
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    MyDeposits seem to have a good business model and will be the Tenancy Deposit Scheme of choice for many Letting Agents and Landlords

    • 20 January 2010 11:31 AM
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    This new charging method is blatently unfair. Many tenancies last many years and end without dispute. On a five year long tenancy TDS will be charging the agent 5 times for doing nothing. A fairer system is to charge once per registration and again if there is a dispute. It's about time ARLA stepped up to the mark and sorted this out.

    • 20 January 2010 11:13 AM
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    My increase id from £1,207 per annum to £12,247 perannum for 567 tenancies and 9 disputes !!! They are non profit making organisation ...... so i presume I am just being ripped off ! They are the worst organistaion i have EVER dealt with and about.

    • 20 January 2010 11:01 AM
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    We have just received our bill for the year with the TDS, £6500 from £1200, a 400% increase, this is with only 6 disputes, I called them and they advised as we held a lot of deposits so we are at risk of high number of disputes, they should charge a set fee per dispute as its a fairer system and will make agents work harder to resolve the problem before going to the ICE. have emailed a complaint letter so lets see what happens, bad times !

    • 20 January 2010 10:21 AM
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    My firm, and many others I suspect, will not be renewing with TDS. We are RICS and NALS members, all our staff are either NAEA or ARLA qualified, and even with over 500 properties under management and 350 new lets a year, we have never had a single TDS claim. Maybe we should pitch for the contract?!

    • 20 January 2010 10:17 AM
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