One in six landlords are still not properly protecting deposits on their properties, with £500 million being held incorrectly.
The Residential Landlords Association is now warning members of the dangers of failing to properly protect deposits.
New research by money.co.uk and the Centre for Economics and Business Research (CEBR) has found that 15% of landlords are sitting on an estimated £514m of unprotected deposits.
Around one in five households in the UK are now privately rented, with the average protected rental deposit £1,040.
Landlords have been required by law to protect tenants’ deposits since 2007 and currently there is around £3.2 billion held in tenancy deposit protection schemes.
However 284,000 landlords are not complying, leaving them open to prosecution.
As well as fines of up to three times the value of the deposit, landlords also lose their right to use a Section 21 notice to regain possession.
Alan Ward, chair of the Residential Landlords Association said: “It is incredible that after nine years landlords are still operating without protecting deposits – ignorant of the financial risk they face as well as losing three times the value of the deposit.”
There are three schemes, the Tenancy Deposit Scheme, My Deposits or the Deposit Protection Service and each scheme has a system of independent adjudication for use in the event of an end-of-contract dispute.
The Residential Landlords Association’s DepositGuard scheme – which is open exclusively to our members – is operated through the Tenancy Deposit Scheme and sees the landlord hold the deposit, with cover provided at competitive market rates.
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