No new assurances have been given as to whether TDS will survive or not – but agents were yesterday urged to back the service or watch it go under.
Former ARLA president Robert Jordan insisted that the TDS remains a far better proposition than the other two Government-approved schemes.
However, it was not made clear at yesterday’s annual ARLA conference exactly how the TDS finances stand and to what extent agents are renewing their subscriptions.
In a hastily added session at the packed conference, Jordan said that TDS had had to face up to the prospect of running out of money last year or impose “unpalatable” rises. It had therefore had to put up its subscriptions.
Jordan admitted there had been unprecedented anger among agents who were shocked by the huge hikes in subscriptions. Jordan said that while the TDS had flagged up the fact that there were rises, it had also decided not to reveal what these would be.
He told the conference, which was abuzz with rumours that TDS competitor DPS had a very strong month in February for new business and that two very large letting organisations are in conversation with Mydeposits: “If there are insufficient renewals, TDS will cease to exist.”
In answer to agent Michael Toogood who asked whether agents would be left holding the baby if they had paid their subscriptions but TDS went under, the reply was that there is an uncertain situation.
Jordan paid tribute to TDS chairman John Hornsey, saying that while he was at the epicentre of the storm, he had been a good friend to ARLA.
Comments
Mike, if I have misunderstood then I apologise. It is such a shame that issues such as this get lost at the time expired end of these 'threads'. My position very simplistically is, that once the TDS Ltd charging was varied from 'Who you are' to 'How often you use it' then the rationale behind the variation in charging disappeared. e.g. why should a member of the Law Society or NALS with the same number of 'registered' tenancies and the same number of ADR scheme uses, pay more in membership fees than a member of ARLA, RICS or NAEA? Some might say just one more example of the vested interest / commercial taint associated with the whole concept. Also, just for information, you may be aware that the Shadow Housing Minister, Grant Shapps, asked a written question of the government yesterday regarding the financial viability of the three TDP schemes. If the Minister's answer has any basis in fact, then it might give you and others some confidence, as according to the Ministers written answer: "All the contracts (TDP)contain safeguards to ensure the financial viability of the schemes". There are those who say it is RICS that are the 'safeguard' - strangely quite on the subject don't you think?
laurie - i dont think that anyone is suggesting that TDS is run only for ARLA members and there are clear structural safeguards set up to prevent this. none of which affects the fact that any directors have a duty to exercise stewardship in the event of a deterioration in the finances of the company.
To Mike Toogood, this is late - no one will see it anyway but I still want to make the point. You said -
"....... i dont want to be left with an even more limited choice if TDS collapses and i do have some faith (although sorely tested) that ARLA can exercise stewardship to the advantage of its members ......".
My only observation is this, TDS Ltd is, in theory, a National CLG licensed TDP facility, NOT a private (fiefdom) arrangement to be manipulated and exploited for the benefit of ARLA members. If that is what it is, then it should be disbanded immediately.
Just this morning I had a call from my managing agent, the tenants have just moved out and there are a few things that need sorting out, not fair wear and tear but probably a 200 quid of bits and pieces that in days gone past the Agent would deduct and the tenant happily pay.
"The Deposit is with TDS are we going to ask for the £200 off the tenant or let it go?" The mutual decision that for £200 we wouldn't bother with the Faff of it all. How sad that Agents are no longer allowed to Manage a portfolio in the traditional way. Effectively deposits aren't worth bothering with.
this story is only partially correct. robert jordan made this point and then (almost in contradiction!) peter bolton-king and ian potter made it equally clear that the TDS scheme would survive under most likely membership subscription scenarios.
i went to the ARLA conference very skeptical (see previous posts) and came away less so. why? because i was able to ask publicly and privately my key questions - namely does the scheme have a future because (i) it can survive on dramatically reduced membership numbers (ii) that it has drastically cut the per case cost of dispute resolution and (iii) that lessons have been learnt to minimise the chance of it happening again. I was reasonably convinced on each count and that is why we are renewing our subscription - it is comparable to the cost of the other insurance based scheme, i dont want to be left with an even more limited choice if TDS collapses and i do have some faith (although sorely tested) that ARLA can exercise stewardship to the advantage of its members. finally, the CLG contract will likely be renegotiated next time round on the basis of what everybody has learnt this time round. there is a lot of contrition around and TDS and NFoPP/ARLA as director are cognizant of their ongoing responsibilities. i for one accept these explanations and think we need to look to the future. but let none of the parties mentioned here be under any illusion as to their future responsibilties - they wont get a second chance! ..........and there is some serious reform at NFoPP/ARLA still needed but that subject can wait for another forum
Chippy James is absolutely right here as is anyone else who asks the obvious question which TDS Ltd doesn't seem to recognise as a threat anyway and for sure now which is "Why not use the free scheme?". They are all as bad or good as each other on adjudication quality, time taken to deal with them, paperwork and so on. The TDS scheme (and Mydeposits) are just not needed if indeed they ever were and why pay for something that is free. The argument about using TDS because it is the one designed for regulatory agents just doesn't wash given the way the scheme has treated those regulated agents. And the use of TDS or Mydeposits just so the agent can earn interest on the deposits is a very weak position given that the decision to do so is solely for agent benefit. It is even more dangerous at times of high interest rates (several years away anyway) when in those conditions a tenant with a large deposit (and the average is now nudging up to £1000) lodged over a long period of time would earn a reasonable amount themselves. Or even worse the Landlord in a case where they end up with the deposit. Where is best practice then? But once in DPS the deposit cannot be easily removed and will, in any case, always be paid out to the lead tenant no matter why so it cannot be easily moved back to TDS Ltd when interest rates do recover. Remember above all pay anything by March 31st and you are contractually obligated to pay any remaining balance on that first invoice by June 30th
I think the TDS is in trouble, my agency has always used DPS, but a lot of good agents (even ARLA ones) have used the interest earned holding deposits to supplement their cashflow. Even if they were giving interest to tenants, what the agents earned was often more. Now that the interest rate has collapsed that cashflow has collapsed. This is the issue here, agents simply cannot afford to support the TDS as part of their business plans anymore. The backers of the TDS; RICS, NALS, NFOPP and DCLG (love all those abbreviations) have to provide a joint written undertaking to all users that the scheme will be supported even if it runs out of money again. Right now the TDS will find it impossible to pick up new clients and without a further rethink very difficult to hold on to who is left.
Please read my stage name more carefully and withdraw the accusation of plagarism!
I reckon a wise man might be be thinking about being ahead of the game and getting their tenant's deposits safely into one of the other schemes.
Back it or watch it go under is the headline! I am sure things will get sorted out in the long term but can only guess who is going to get caught in the crossfire when there isn't quite enough to return the deposits should the scheme go under.
Publication of full investigation of the cost of running the scheme might put a few minds at rest but asking us to deposit more money with this scheme???
Is it a rollover this week on Euromillions? that might be the answer.
To Industry Observer. Happy to provide views on insurance schemes but obviously not 'in camera'. Not sure how one progresses this .....? I am happy for the Editor to provide my e mail contact details to you - not sure if that's allowed?
To the plagiarist of my name - Just an Observer!! Nice try but the problem is twofold. First money paid as rent can only ever be used for rent and not for dilapidations so unless your leaving tenant is welll adrift when they leave you will only get the one month or so benefit. Mind that does leave the actual deposit to be used for dilaps. But you need to be careful here as it is just like the fire regs and contrivances being frowned upon. If you are constantly holding 2 months rent and not using it but using the monthly payments as they come in say from month 5 of a 6 month tenancy then in effect you will almost certainly be deemed to have converted that 'original' money to deposit status. That's bad enough but with the other month you hold then it does become a premium. The other factor is how do you persuade a tenant to part with three months money at the start when the only reason is Landlord benefit? My offices have been doing this for some time now bit it is one of those activitie s that is a silent friend. If one was ever challenged I'd tell them to pay the money back as overpaid rent and not use it for any other purpose. There is Case Law on this anyway. You are right though the legislation was never needed being based on one of the most scurrilous and biased research reports ever written UNSAFE DEPOSITS courtesy of CAB. LAURIE sorry I missed your answer to my enquiry of you. I'd be interested in your opinion on insurance schemes instead of deposits. I think you are a bit harsh talking about being sectioned but with a free laternative on offer you have to wonder just what oin earth TDS Ltd thinks it is up to. Someone said time to move on - exactly forget about changing these schemes and focus on the decision at hand - and above all study the TDS Ltd rules. Make a payment on March 31st and you have to pay the second part on June 30th (I assume no-one is paying the first half in full if they are then they do indeed need to be certified!!)
Spectacular - the conference had 50% of the current TDS Ltd board in attendance (no FD - I presume or RICS) and ignoring the charging issues, neither one spoke, even to apologise for the inconvenience or anxiety that their gross stewardship failings had caused. Quite right, I wasn't there and it sounds more like the 'twilight zone' the more I hear of it. Renewing with TDS Ltd - you would deserve to be sectioned.
Agree Mr Wyatt. Jordan did well and talking with fellow delegates the feeling was that ARLA got the TDS part right. No point on going over the same old ground. Clearly Laurie was not at what was an excellent conference. Time to move on?
If the TDS charged a landlord and tenant a handling fee of £150 each for a claim, that would no doubt negate all of these stupid little disputes.
I thought Jordan did a good presentation yesterday. I was curious though, to see that TDS top dog John Hornsey was on the delegate list at the conference. It would have been much more effective to have heard from him. A Q&A session with him would have been a lot of fun. IMHO TDS is still the best of the lot, but there remains a thick smoke screen as to the exact formula of the new annual charges - a matter which was brushed over again at the ARLA conference.
Just a tad more effectively than paying someone to look after an equivalent amount of money.The traditional deposit of 1 months rent months is no more a deterrant for rent arrears or a tenant failing to look after the property than simply collecting the rent a bit further in advance. Removing a body of tenant biased arbitrators and putting the Profession back in the hands of Professional Property Managers really ought to be the way forward. The vast majority of NFOPP Agents are sound and professional. The real shame is that the requirement and justification for this legislation ever arose. If indeed it did.
The cost of running a Property Management Office Account, Client cash account and sometimes multiple client cash deposit accounts used to be...... Free! On the basis that while no interest was needed for the deposit accounts the bank could do well, lending that money to other borrowers. Maybe we could blame the whole worldwide banking crisis on DCLG taking vast sums of money out of circulation in 2007
The point everyone seems to be missing here is why is TDS penalising the agents? We don't want to waste our time filling out paperwork. why do they not make a charge to those Tenants and Landlords that use the service this would have the benefit of making any tenants and landlords think twice before forcing a dispute to go to TDS it would ensure the profitability of the service and reduce the case load to the genuine ones. Those who govern our industry be it Naea, Arla, TDS, The Government etc really do need to consider all things in a commercial light which us lesser mortals do on a daily basis.
Just an observation - How does taking two months advance rent deal with dilapidations issues and for that matter rent arrears as well?
It is probably a good time to stop taking deposits all together. Paying two months rent in advance does not form a premium and doesn't need lodging with anyone other than the agent,
What nonsense from Robert Jordon - talk about "non answers"!
NFoPP and ARLA should wake up and start really fighting for its members.
Why the h*ll should we be expected to pay through the nose for something which is not fit for purpose. Let it go bust. As we are forced by flawed legislation to use a deposit protection service - use the free one, you know it makes sense!
Simple Peter, almost certainly because he doesn't want to have an 'unhealthy' relationship with a theodolite?
Agree with Jim's ?????, when you finally get to read his comments!!!
I would like to know why Robert Jordan thinks TDS is better than the DPS.
I.O. actually, you asked "Laurie is it correct thast you are in fact insurance adviser to one of the two Franchisors mentioned as having to pay higher fees?" to which I replied “I have acted as a consultant to various letting industry organisations, including one of the two franchisors to which you refer ......” That is as far as I am prepared to go I am afraid – client confidentiality – if the answer is so important, perhaps you should ask them? As to your second point, I fully agree who does care? – well I suppose those that should, are the ones who become duped into part renewing as a result of peer group pressure and end up with having assumed a significant financial exposure from which they can’t extricate themselves. Finally, as for the Robert Jordan comment of John Hornsey being in the epicentre of the storm, it is rather similar to the Lone Ranger remarking to Tonto that ‘they’ are surrounded by Indians – remind me, who are the Directors of TDS Ltd?
When will the Government realise that their principal of this service being free to the tenant regadrdless of blame is fundamentally flawed? All they have to do is introduce a cost per arbitration and have the ICE apportion cost base on his/her findings. Is that not fairer and more how the Court system worked before this nonesense was ever deemed necessary?
Former ARLA president Robert Jordan insisted that the TDS remains a far better proposition than the other two Government-approved schemes.
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Laurie as asked yesterday in another thread can I ask whether it is Belvoir or Martin & Co that you are the insurance adviser for?
In terms of back TDS or watch it go under who cares when there are two alternatives and one of them is free?
So, rather as expected the message seems to be, if you don’t renew TDS Ltd will probably go bust (if it isn’t already), if you do renew it still might in the future, leaving letting agents with contractual financial obligations which I am sure a liquidator would enforce. Singularly unsatisfactory one would suggest. The other point I find unbelievable is, given the furore that this has caused, how NFoPP / ARLA thought they could stage this conference without having a session dedicated to the TDS Ltd would seem to hold the entire NFoPP membership in utter contempt.