Landlord who demanded admin fee for tenancy deposit ‘may have broken law’

A landlord demanded that their tenant paid an admin fee of £30 to get their deposit protected – and then demanded £50 when the tenancy was renewed after six months.

The landlord’s six-month renewal letter said: “As discussed, if you want your deposit protected, please forward payment of £50. Alternatively, I’ll just leave it as it is.”

However, it appears that the deposit was not protected at all.

And while the tenant – who is about to move out – is worried as to whether she will get her deposit back, it seems it is the landlord who should be concerned for breaking the Housing Act, not once but twice.

Experts rallied to give their opinions on the matter, aired yesterday on the forum Property Tribes.

David Smith, EYE’s own legal guru, said the landlord “cannot make the protection conditional.

“Also as this is a non-optional fee it should have been advertised at the point of advertising the rent. If it has been paid it can probably be recovered under the new civil recovery powers linked to the Consumer Protection from Unfair Trading Regulations.”

Smith added that the tenant could double-claim (ie, for the original deposit plus three times its amount, twice over) against the landlord for two breaches, and suggested the tenant should report the landlord to Trading Standards.

The TDS also gave its expert view that the landlord is in violation of the Housing Act 2004.

“It’s very clear cut. The landlord must protect the deposit within 30 days and provide the tenant with written details of their protection (‘prescribed information’), also within 30 days of receipt.

“The Housing Act is silent on administration charges to tenants for deposit protection, but this has no bearing on the landlord’s responsibility to protect.

“At TDS we regularly get well meaning but ill informed landlords contacting us because they find out too late that deposit protection regulations exist.

“We advise them to protect as quickly as possible, and should it come to court a judge may look favourably upon this when deciding the amount of the penalty.”

We find it extraordinary that more than eight years after tenancy deposit protection became mandatory, there is still such ignorance of it.

But isn’t the law a bit of an ass, remaining silent on whether it’s okay or not to charge an admin fee and yet, whether or not a tenant pays this, the deposit has to be protected anyway?

More at Property Tribes here

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3 Comments

  1. Katie H

    Apologies to the TDS but if the landlord used The DPS he wouldn’t have a charge for registering the deposit and therefore, no charge necessary to the tenant. Or, he makes sure that his charges are clear from the start before the signing of tenancies…

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    1. Ding Dong

      Totally agree Katie…ARLA, RLA, NLA all make good money out of deposit compliance hence some agents and landlords charging the fee to the tenant….

      Only one scheme is required DPS custodial, and life would be much simpler.  Sadly the organisations who purport to represent the industry actually are making money off the back of badly introduced legislation.

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  2. Anonymous Coward

    IF (and given the DPS protect for free) anyone should be charged an admin fee for the protection of the deposit, shouldn’t it be the landlord?

    Given the punitive nature of failure to protect a deposit, surely the person who benefits most from an agent doing this job properly is the landlord…

    At my last company, we had it in our scale of charges for the landlord and usually chucked it in as a “freebie” when taking new properties on the market as a negotiating tactic.

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