Tenancy Deposit Scheme lays out welcome mat for all private landlords

The Tenancy Deposit Scheme has not notified the launch of its new service for private landlords to the OFT – because it says it did not have to.

Agents had queried how the TDS, which until now has only admitted letting agents who belong to a specified membership body or scheme, can suddenly admit private landlords. Private landlords can use the TDS after the scheme re-opened its books to them. Landlords can be unaffiliated or take advantage of special rates in a scheme that is exclusively for members of the Residential Landlords Association.

The TDS has been prescriptive about agent users. It originally allowed all agents to join, but subsequently closed its doors to all but members of the NAEA, ARLA, NALS, RICS and the Law Society. It said its hand had been forced by its insurers after higher levels of claims.

Last week, however, it announced the launch of DepositGuard, a scheme which will be marketed to private landlords who are members of the Residential Landlords Association.

But a spokesman for TDS said: “We did not notify the OFT because this is not a new scheme – it is merely a different category of membership and the scheme is the same. We have always had different categories of membership.”

He said that private landlords did not pose a risk as they were regarded as ‘illiquid’. He said that unlike a rogue agent who might disappear with tenants’ money, a landlord would be tied by ownership to each property owned and where the deposit is protected.

Landlords who are also letting agents can only use DepositGuard for their own properties, and not for properties that they manage for others. In addition, there is a limit of £100,000 in deposit money held by any landlord wishing to use the scheme.

The spokesman also pointed out that it is more expensive for landlords to use the new DepositGuard scheme, than for agents to use the existing TDS. Landlords have a ‘pay as you go’ model, paying £15 per deposit up to £500, and £22.50 per deposit over £500.

Both sums undercut the Mydeposits scheme set up by the rival National Landlords Association, while the DepositGuard scheme has no joining or subscription fee. However, non-RLA landlords can also use the scheme.

The TDS said by way of further clarification: “Membership of the TDS is open to all individual landlords. However, until recently, landlord applications have been individually underwritten by the insurers.

“The TDS has now agreed with the insurers that this is no longer necessary which is why it has re-launched the membership category.

“To reflect the contribution made by the RLA to the modified scheme, RLA members are offered a discount but the scheme is open to all landlords. Details of the fees for landlords are available on the TDS website.”

 

%d bloggers like this: