International News — Massive vote of no confidence in current tenancy deposit safeguards
Citizens’ Advice, UK (11 May 2004)

Hundreds of thousands of private tenants feel cheated out of millions of pounds by rogue landlords who refuse to pay back rent deposits when they move out, according to new figures released today by national charities Citizens Advice and Shelter. These figures are published on the day that MPs are due to discuss an amendment to the Housing Bill designed to protect tenants’ deposits and resolve disputes.

A MORI survey commissioned by Citizens Advice found that a quarter of private tenants (24%) who had paid a rent deposit within the past five years had had all or part of it withheld at the end of the tenancy. Of these, only one in seven (14%) felt that there was justification for withholding as much of the deposit as required.
Citizens Advice and Shelter are campaigning for a statutory national tenancy deposit scheme to protect tenants’ money and resolve disputes to be included in the Housing Bill - a measure that is backed by a wide range of other organizations including the Consumers Association, NUS and the Association of Residential Lettings Agents, as well as over 180 MPs. Currently deposits worth over £800 million are held by landlords and their agents, with no regulation over how much is charged, how the money is held, or what arrangements are made for its return.

The two charities warned that not only do tenants end up out of pocket, but many face hardship or debt as they struggle to raise the deposit for their next home. Tenants simply have to write off the loss or face lengthy and costly court action, where a judgment in their favor is still no guarantee they will get their money back.
A national rental deposit scheme would provide an independent banking system with a built-in mechanism for settling disputes locally, ensuring the swift and safe return of deposit money. The scheme would be self-financing through interest generated by the money it holds in bond.

Citizens Advice Chief Executive David Harker commented:
"Six years after we first raised this issue we find that far too many landlords continue to treat rental deposits as their own money, instead of money handed over to them in trust. Many do not even bother to give tenants a proper reason for failing to pay it back. It is high time this scandal was ended, and we therefore welcome the Government’s commitment to legislate to protect tenants’ money."

"A simple, tried and tested solution is available which is better for landlords and tenants alike. It has been proved to work in Australia and could work equally well here. The current Housing Bill presents the Government with the perfect opportunity to act, and there can be no excuse for further delay, effectively condemning millions more tenants to becoming victims of what has been described by some as ‘legalized theft’."
Adam Sampson, Director of Shelter, said:

"Every day 350 private tenants are ripped off by rouge landlords - that’s 127,000 tenants every year. We must protect tenants from the cowboy landlords who ride off with their tenant’s money without any concern for the hardship they cause. These landlords also do great damage to the reputation of the vast majority of good landlords. There is no justification for not legislating and we hope today’s debate will persuade the Minister to bring the protection of tenants’ deposits into the Housing Bill."

Cases seen recently by Citizens Advice and Shelter include the following:
A man sought advice from a CAB after £700 of his £900 deposit was withheld to pay for cleaning and painting a radiator - work he disputed was necessary. When he queried this with the landlord and lettings agency, each claimed the other was responsible for returning his deposit, and refused to discuss the matter further.

A woman who requested the return of her £380 deposit when she moved was told the landlord did not have the money to be able to pay her back.

In one CAB case, the agents were withholding a deposit of £3,000 without giving any reason.

A student who took court action for the non-return of her £120 deposit got a judgment in her favor for the whole sum plus interest and court costs, but the agent simply refused to pay.

A pregnant woman moving to be closer to her family was given a check for the whole of her £800 deposit after her landlady inspected the flat and said she was very happy with its condition. But she later stopped the check saying the flat had to be cleaned. She refused to agree to a second opinion from a professional cleaner, saying that she had already done the cleaning.




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