Activist group Generation Rent has told The Guardian that official deposit schemes for renters are “putting millions in unscrupulous landlords’ pockets.”
Almost half (46%) of renters said they did not know they could challenge deposit deductions they deemed to be unfair. Only 4% have used the formal dispute resolution process to try to reclaim the money.
Dan Wilson Craw, deputy chief executive of Generation Rent, tells the newspaper that the system was “failing renters who are put off from challenging unfair deductions by unclear rules, and threats and delaying tactics from landlords”.
He adds: “Ultimately, that puts millions more in unscrupulous landlords’ pockets. The uncertain timescales and unclear rules of the deposit system, as well as obstructiveness and threats from some landlords, mean that accepting unfair deductions to get some cash back quickly can feel like the better option.”
The research, which Generation Rent claims is based on 2,000 private tenants, apparently found that a quarter of those who did not challenge unfair deductions said their landlord either threatened to make a larger claim if they raised a dispute, refused to take part in the adjudication process or had not protected the deposit in the first place.
It says data from one deposit protection scheme, TDS, showed that 77% of tenants got some of their disputed deposit back and 32% got all of it back. Generation Rent analysis found tenants who disputed deductions won 79% of the disputed money back on average.
Wilson Craw goes on: “Because challenging deposit deductions is usually worth it, renters put off from doing so are losing hundreds of pounds of their own money. The government’s review of deposit protection is an opportunity to build trust in the system so tenants have the confidence to challenge unfair landlord claims.”
Landlords must legally put a tenant’s deposit in a government-approved tenancy deposit scheme. There is a free dispute resolution service for tenants who disagree with their landlord on how much deposit should be returned. Ministers have said they were reviewing the system and “identifying areas for improvement”.
The activists are demanding a 14-day deadline for deposits to be returned at the end of a tenancy and landlords to be legally compelled to take part in a dispute resolution if a tenant pursued it, with disputes resolved within 10 days.
It also wants landlords and agents who broke the rules, or made repeated excessive deductions, should face “meaningful penalties”.
A government spokesperson has told the media: “It is completely unacceptable to unfairly withhold a tenancy deposit, and this government is cracking down on rogue landlords who make tenants’ lives a misery. Our Renters Rights Bill will give councils stronger investigatory powers, for example making it easier to get financial information from landlords suspected of abuses.”
This article is taken from Landlord Today