An agent has raised a formal complaint against the Deposit Protection Service for the way it has handled the return of money owed to tenants.
Tenants of Hampshire agents Honey Lettings are owed the excess from the deposit they had originally paid.
Honey Lettings notified both the tenants and DPS on October 4 of the money owed. However, by yesterday repayment to the tenants had still not materialised.
The money is a refund of the difference between what the tenants had originally paid and the new deposit cap of no more than five weeks’ rent that came in on June 1.
David Hutley of Honey Lettings said he had asked the DPS to refund the money, using the email address the DPS had given on its own template for agents to use.
Chasing up the payment, he was then told that he sent the completed template to the wrong email address, but that DPS would process the payment in three to six days.
Hutley complained on October 16 – when he was told it would take four weeks to respond to the complaint.
Meanwhile, he says the tenants are chasing the agency itself for the money.
Hutley says he has been advised that as agents, they remain legally responsible for the deposit.
He also claims that DPS’s entire system for returning excess amounts is flawed, with the money being sent to the first tenant listed on the agreement but no checks made that the money has been received, cashed in, or distributed among other tenants.
Hutley said that as agents responsible for the deposit, his firm would not be able to prove that the money had been correctly returned.
He said: “The huge fines hanging over agents where we get this wrong make for sleepless nights.
“I am not comfortable that the DPS has thought this through and the lack of an accountable process visible to the agent makes me uncomfortable.
“Our dealings with the DPS have been poor, and their claim to reply within five days is not kept.”
Yesterday, a DPS spokesperson told EYE: “We’ve successfully processed over 40,000 [excess] deposit returns since June 1.
“If the information provided is correct, deposit returns are processed in around 24 hours or less.
“If we need more information our system automatically emails the landlord or letting agent with a request.
“Unfortunately in this case that email wasn’t sent.
“We’ve apologised to the letting agent concerned, manually processed their request for the return of the deposits, and will now send refund cheques to the relevant tenants.”
However Hutley said that the DPS response missed the point.
The DPS’s own spreadsheet template had given the wrong email address, and a link which Honey Lettings had been told would let it create its own spreadsheet did not work and took over a month to put right.
He also pointed out that the first tenant listed might not necessarily be the lead tenant, or the most appropriate person to receive the refund.
Hutley said: “The response sums up the DPS approach, vague and inaccurate.
“I can’t believe we are the only agent trying to resolve this.
“The issue will come to a head next year when landlords and agents can be hit with large fines for holding an incorrect deposit amount.”
Interesting that the agent has decided to return the ‘excess’ portion of the deposits. The act quite explicitly says ALL tenancies should comply from June 2020 but official guidance on gov.uk quite explicitly contradicts this.
’Superstrike 2’ in the making.
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I sympathise with David Hutley. He is right in that he is not the only one struggling to deal with the DPS.
I am working through all my portfolio renewing the contracts and reducing deposits as required. Its a very long job with lots of repetitive explaining to Landlord and Tenant. I have resorted to claiming the whole deposit back from the DPS and then distributing it myself with the tenants’ agreement and then re registering the new amount and the new contract details with the DPS. I have experienced a lot of problems with tenants being unable to activate their DPS ‘accounts’ and when they call the DPS they are sometimes told that I am dealing with the refund of excess deposits the wrong way… I dont see a viable choice in all honesty..
However, a new contract with correct dates and a deposit amount that matches up with the figures on the DPS seems to me to be the best solution in my opinion.
I look forward to others’ comments on this.
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The position of least risk is to return any excess deposit. The last thing you need in court when trying to enforce a section 21 notice, is having to explain why you are holding more than 5 weeks. (if this was every brought up by the defence or the judge)
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dear Hampshireagent007 – totally agree
increasingly it seems more traps are being set
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Tenancy Deposit Scheme (TDS) has a much simpler solution for reducing deposits to comply with the deposit cap. In TDS Custodial, our online “Change deposit amount” function allows agents and landlords to easily decrease the deposit amount themselves without ever having to contact TDS directly. TDS then returns the excess amount to the lead tenant.
TDS provides a free resource centre which includes a wealth of information on the Fees Ban and Deposit cap, as well as instructions of how TDS members of both the Insured and Custodial schemes can easily reduce their deposits – you can find this at depositcap.com.
If you’d like to find out more information about TDS and our simple deposit cap solution, submit your details at the following link and we’ll be in touch – Find out more
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If no Renewal Tenancy is issued, then Any Deposit amount taken Before the 1st of June 2019 does NOT have to be returned.
There is Rarely any reason to renew a Tenancy agreement and its not recommended for a number of reasons.
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