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Whether it’s happened to you or somebody you know, you’ll have no difficulty appreciating the stress caused by deposits being withheld. In fact, estimates indicate that about 350 tenants lose money to dodgy landlords every day, and many tenants write off losing the deposit as a cost of renting privately. So what is the current situation and what can be done to make deposits easier to retrieve?
The deposit minefield:
- About £800m worth of deposits are held by British landlords at any one time, and the government believes that between £20-65m are wrongly withheld each year.
- Cases dealt with by Citizens Advice and Shelter include a woman who was told the landlord did not have enough money to return her £380 deposit, a student who successfully took her landlord to court to retrieve her £120 deposit only for the landlord to refuse to pay it anyway, and agents withholding a deposit of £3,000 without giving any reason.
- Citizens Advice chief executive David Harker has said: "Far too many landlords continue to treat rental deposits as their own money, instead of money handed over to them in trust. Many do not even bother to give tenants a proper reason for failing to pay it back."
Remedies
What can you do to avoid what has been branded ‘legalised theft’?
A good place to start is your local Citizens’ Advice Bureau (see http://www.nacab.org.uk/ for details of your nearest branch) who can advise you on what steps to take.
Renting through an agency:
If you are renting through a letting firm which is a member of the Association of Residential Letting Agents, then you can ask for an independent dispute resolution procedure to be carried out. This is a way of taking things further which should, hopefully, settle the matter once and for all.
Renting from a private landlord:
- If the landlord is claiming you owe him for damage to the property, you could start with the Inventory and Schedule of Condition, an important document which they should have provided at the start of the tenancy.
- A potentially more effective course of action is to tell the landlord you propose to write to the Inland Revenue to ask them to confirm that he has included your deposit as income in his tax return – and a swift reaction should follow.
If all else fails: the current way to retrieve deposits is to initiate court proceedings through the small claims court.
The future of deposits: there are plans to follow a similar path to countries such as New Zealand, Australia and Canada, where the money is held in a separate account and both parties have to sign to release it so neither can run off with it. However, some people believe that this would not eliminate persistent offenders.
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