Date Published 04 March 2013
The Tenancy Deposit Scheme has confirmed that it has not changed its rules for letting agents – despite persistent claims on the internet which triggered anxiety among agents that they could be inadvertently breaking the law.
One article, written in December and which reappeared in a forum last week, claims that the TDS changed its rules in January, requiring landlords and agents to update the deposit record when a tenancy becomes a statutory periodic tenancy.
The article warns: `If the record is not updated the deposit protection will come to an end with this scheme on the last day of the fixed term … This change is very significant because if the landlord or agent has not updated the record, the deposit is not protected and the law has been broken.
`If the landlord or agent has updated the record but has failed to give the tenant the updated information the law has been broken.`
However, the TDS has said that this is not so. Rules that apply only to its newer scheme for landlords do not apply to agents.
A spokesman told Letting Agent Today: `Last year inaccurate posts were made online implying that changes had been made to TDS rules without informing members and that members were being put at risk of breaking the law as a result.
`This was absolutely not the case. No changes had been made to agents’ rules of membership.
`The authors did not take into account that the Tenancy Deposit Scheme for Landlords was a new and different membership to that of letting agents.
`They did not seek any clarification or advice from us before posting information publicly on how our scheme works, and we received a large number of calls from worried agents and landlords wrongly thinking that their tenants’ deposit protection had ended without them knowing. We provided them with the correct information to reassure their anxieties.`
In January last year, the TDS launched a new membership option for landlords to protect their tenants’ deposits directly and not via a letting agent, called ‘Tenancy Deposit Scheme for Landlords’ (or ‘DepositGuard’ for members who join via the Residential Landlords Association).
The TDS spokesman said: `With this new membership, if the fixed term tenancy agreement ends and continues on a statutory periodic basis, members should update the TDS database to reflect this and for protection to continue.
`This is a very simple online ‘tick box’ procedure and the landlord receives up to four notifications from two months in advance of the end of the fixed term that they should do this. If deposit protection ends, both the landlord and tenant are notified.
`Although we have received consistently positive feedback on the usability of the Tenancy Deposit Scheme for Landlords (backed up by survey data), and have no evidence to suggest landlord members are failing to update tenancy information correctly, from April we are simplifying the IT system so that fixed term tenancies will automatically become statutory periodic on our database when they end.
`This is to reduce the administration for landlords and to remove any risk of them forgetting to update the database.
`As with any updates to the scheme which affect our members, all members of the Tenancy Deposit Scheme for Landlords will be duly informed once the updated procedure is finalised.`