TDS - Wealth Warning from RLA
Both insurance-based schemes are fundamentally flawed.
In the event of a disputed deposit, you will have to produce a clear and accurate schedule of condition for items on your inventory. And in the case of Tenancy Deposit Solutions, you will be required to show the original invoice.
RLA believes this seriously jeopardises landlordsí chances of fairly recovering costs for damaged property.
In the case of TDS, landlords are required to have a separate client account, which may affect a landlordís capital or cash flow position. We are also concerned about the possible use of Deposit Scheme data by Inland Revenue to harass landlords with unjustified enquiries.
The RLA is continuing to challenge the basis on which both schemes are being made available to other landlords.
The true impact of these schemes will not become clear until at least September when the first tenancies come to an end.
What should you do after April 6th?
Do Not Take Deposits Ė if the value is less than £600 it simply isnít worth it.
The bigger the deposit, the GREATER YOUR RISK of loss. If you normally have minimal disputes with tenants, the cost, bureaucracy AND RISK make the insured schemes very unattractive.
Find alternative methods to control your tenantsí behaviour. There are several discussed in the latest edition of the RLA magazine which is in the post.
If a deposit is essential - use the Custodial Scheme. It costs you nothing. But remember, your administration must be faultless.
Remember also -there is no hard and fast rule. You donít always have to take deposits. Judge your tenants accordingly.
And finally - RLA is still challenging the government Ė for example for student tenancies Ė where the property is not the tenantís main residence. (Students will often be classed as resident with parents). IN THIS CASE TDS MAY NOT APPLY.
We anticipate introducing an means of protecting Landlord's fixtures and fittings through a unique tenants contents insurance policy. More details will be announced shortly.
We will keep you informed of progress, to members by mail and email, and the RLA website.