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Buy to let investors need to be conscious of abiding by the law and placing their tenant’s deposit into a government-backed tenancy deposit protection scheme (DPS).
Thousands of landlords are breaking the law by failing to protect the deposits of their tenants. They are entitled to seek a deposit from tenants as security in case the tenants cause any damage to the property. However, deposits taken must be protected within 30 days in any one of three government-authorised insurance based or custodial protection schemes operated by Deposit Protection Service (DPS), my|deposits and Tenancy Deposit Scheme (TDS).
New research from website comparethemarket found that 33 per cent of renters are aware that their landlord has not put their deposit money into a government-backed DPS. This is a worryingly high number and does not account for those who are unsure.
19 per cent of tenants also claimed that they do not have a contract with their landlord. This could have serious ramifications if any legal issues were to arise.
18 per cent of tenants claimed that they have had money taken from their deposits when they finally vacated the property. It is therefore important that they are aware the money has been protected prior to this in a legitimate deposit protection scheme.
The study also found that some landlords are slow to respond to requests from tenants. One third, or 30 per cent, of tenants said that they are forced to chase their landlords when a problem arises that needs fixing. However, the research found that the landlord is not always who is at fault. Barriers to access could explain some of these issues, with 14 per cent of tenants surveyed explaining that they need to go through their letting agency in order to contact their landlord, a lengthy barrier to communication.