13th October 2009I have recently come across an unusual situation which appears to be a loophole or flaw in the Tenants Deposit Scheme Regulations.
Simply, when a tenancy commences, the tenants deposit MUST be registered with one of the approved schemes. Both landlord and tenant receive confirmation of this and are able to check to see that their deposit is safe.
One landlord recently transferred management of their property to Bushells. The agent wont, or cant, pay us the security deposit which they held and which was registered under one approved scheme two years ago.
When I contacted the TDS scheme for assistance, it transpired that the agent concerned had not renewed their registration and that the deposit was no longer covered. I can find nowhere in the 2004 Housing Act which covers such a predicament.
Remember, the Landlord is ultimately liable to refund the deposit to the tenant and then must consider taking action against the agent if it is economic to do so.
Bushells advice is this. Check periodically that the deposit remains registered especially in the event a tenancy is renewed or extended. Better still, use an ARLA agent as all accredited agents hold Clients Money Protection Insurance in addition to the cover provided by a Tenants Deposit Scheme.