RLA TENANCY DEPOSIT SCHEME

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Indications from the RLA’s own survey are that out of the 75% of landlords who intend to take deposits after April 6th - one third CURRENTLY intend to use the custodial scheme, one third an insurance backed scheme and the remaining third are still undecided.

The RLA is confident that a scheme will be available for members who still want to take deposits.

RLA members will receive details in their copy of Residential Property Investor, which will be sent next week.

The negotiations have been delayed because important legal issues have arisen which have had to be referred back to the Government. A Government response is STILL awaited.

Tax Warning?

Concerns have been raised that having to register a tenancy deposit through any of the schemes will mean that the Government Agencies, particularly the Inland Revenue, may be able to obtain access to the records if they consider there has been tax evasion.
Although we are assured that appropriate data protection measures are in place, the Inland Revenue has recently achieved a notable success in accessing details relating to foreign bank accounts as part of its measures to counteract tax evasion.
Undoubtedly, the Government will be able to obtain some valuable data relating to the private rented sector from tenancy deposit information.

HEADS UP 1

If you can take a deposit for a new tenancy before 6th April then do so. Try to bank it before that date. Where the deposit is received before 6th April it will be outside the new tenancy deposit protection scheme even though the tenancy may start after that date.

HEADS UP 2

Under the new scheme if you want to succeed in retaining the deposit to meet damage claims, it will be essential to have a proper inventory/schedule of condition both at the beginning and end of the tenancy. Otherwise, the tenant is likely to be given the whole deposit back.

Landlords will have to ensure that proper procedures are put in place. Be warned.

HEADS UP 3

Tenancy agreements will need to be amended and an updated agreement will be available on the RLA website at the beginning of April.
If you intend to operate a Government (custodial) tenancy deposit scheme for your deposits you will have to give a prescribed form to the tenant to tell them how the deposit is being handled.

Alan Ward

20/03/2007 00:00

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