The government’s Tenancy Deposit Scheme, which comes into effect on 6 April, deserves a ‘Red Tape Warning’ according to leading professional organisation the Residential Landlords Association.

“For, after a great deal of research, we are now convinced that both insurance-based schemes are fundamentally flawed,” says chairman, Lee Dribben.

In the event of a disputed deposit, landlords will have to produce a clear and accurate condition schedule for inventory items.  And they may be required to show original invoices for damaged contents.

“This seriously jeopardises landlords’ chances of fairly recovering costs for damaged property,” says Lee Dribben, “and it’s unlikely to achieve the government’s objective of quickly returning deposits to tenants.

“Landlords are required to have a separate client account - which may affect their capital or cash flow position. And we are also concerned about the Inland Revenue’s possible use of Deposit Scheme data to harass landlords with unjustified enquiries.”

So the RLA, whose members own over 100,000 private rented properties throughout the UK, is continuing to challenge both schemes that are being made available to landlords - the true impact of which will not become clear until at least September when the first tenancies come to an end.

So the association is recommending that landlords should not take deposits. “If the value is less than £600 it simply isn’t worth it and the bigger the deposit, the greater the risk of losing it,” says Lee. “So, for minimal disputes with tenants, the insured schemes are very unattractive.

“If a deposit is essential, the Custodial Scheme is a better bet - although, as usual, administration must be faultless. But there is no hard and fast rule – landlords don’t always have to take deposits if they judge their tenants right.”

The Residential Landlords Association is also challenging the government over student tenancies where the rented property is not necessarily the tenant’s main residence. Because their parental home is usually still classed as the main one, the Tenancy Deposit Scheme may not apply.