Channel 4 report highlights importance of right deposit protection measures

Deposits on rental properties have long been a source of anxiety for both landlords and tenants, with the former group needing to adhere with the increasing amount of legislation concerning the holding of tenant deposits. The latter group, meanwhile, simply want to know that their deposit will be protected, with Advanced Rent's tenancy deposit replacement insurance also allowing them to move into a new property quickly without the need to wait for a scheme to release any deposit they may have had on a previous property.

Indeed, one recent Channel 4 News investigation has highlighted how tenants can be put at risk by rogue letting agents and ineffective deposit protection schemes. It started last November when the broadcaster tracked down lettings agent and self-styled property guru Daniel Burton, who had been running seminars on how people could use the rental market to get rich quick. His company Unida Place maximised profits by renting from landlords and subletting properties as single rooms, getting in the greatest possible number of tenants.

Mr Burton's registration of deposits with MyDeposits, a government approved protection scheme, ensured his compliance with the law. The insurance-based scheme allows the landlord or letting agent to retain the money for as long as the tenancy runs. However, it was discovered by Channel 4 News that a failure to comply with procedures had led to Mr Burton's expulsion from MyDeposits. Despite the supposed aim of a deposit protection scheme to protect deposits from rule-flouting landlords or letting agents, MyDeposits was only able to expel the landlord, not safeguard tenants' deposits.

If a landlord or letting agent cancels their membership of the MyDeposits scheme, the affected tenants are told that their deposits will become "unprotected" in three months. However, this was also the case for the tenants of Mr Burton, who was left with a bank account of unprotected deposits worth £145,000. MyDeposits CEO Eddie Hooker told Channel 4 News that it had simply complied with the relevant legislation, the deposits becoming unprotected due to Unida Place ceasing to be a member of the scheme.

Nonetheless, the predicament for so many tenants of a supposed deposit protection scheme not protecting their deposit does make one wonder about the system's openness to abuse. It again simply highlights the importance to both landlords and tenants of the right tenancy deposit replacement insurance, as offered by Advanced Rent, and which can bring convenience and peace of mind to both parties. Contact us now for more information about our own policy.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) is represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.