The New Deposits System
What is different?
The rules have changed and students will finally get the safeguards that have been needed for so many years.
Since April 6th 2007 landlords have to protect all deposits with a third party organisation. In the case of a dispute at the end of your lease there is unbiased party and a much higher chance of getting all of your deposit back.
Why change the old system?
According to the Guardian, each year more than 100,000 private tenants (many of which are students) have their deposits withheld, often unlawfully and without good reason.
The government has authorised three companies to provide deposit protection:
How does this affect me?
You should check with your landlord which service they are using to protect your deposit. The most friendly for students seems to be the Deposit Protection Service, this is the only scheme where the money is physically looked after by a third party (the others are insurance based) and also the only free scheme.
Once your deposit is protected your landlord should give you a deposit ID number within 14 days, you can then access the details of your deposit by logging onto the DPS website.
In the event of a dispute at the end of your tenancy an independent Alternative Dispute Resolution (ADR) service, run by the Chartered Institute of Arbitrators, will aim to resolve any disputes quickly and without the need for court action.
How are landlords twisting the system?
Some of the more questionable landlords are using the new laws to swindle even more money out of their student tenants. Studentsay recently had a landlord admit to us that they would charge each student £40 to protect their deposit using one of the insurance based schemes and then skim £20 of that as profit! When that is added up over hundreds of students it means thousands of pounds extra for unscrupulous landlords..
Remember, you needant pay any money to have your deposit secured - there is a free service available, the DPS and if your landlord has chosen not to use this, you have to wonder why!