It certainly has been a step in the right direction with deposits having to be placed in a safe deposit scheme giving tenants peace of mind, however, for the increasing number of new private sector tenants being housed through rent deposit guarantee schemes, and paying up their deposits on a monthly basis, there is a glaring loophole in the legislation.
As the legislation states, landlords must lodge all deposits in a safe deposit scheme within 30 days of the tenancy start date. With rent deposit guarantee schemes, the vast majority of tenants will pay the first instalment on the day of signing, which is then protected, however, with every other monthly payment landlords are under no obligation to lodge anything!!!
Rent deposit schemes are providing a gateway into renting for some of the most vulnerable people in receipt of benefits or low incomes, and this loophole in the law offers no protection against unscrupulous landlords, and that is what the legislation was supposed to do.
I’d be keen to hear Shelter’s stance on this, and if they plan to lobby for a change to enforce every payment, not just the initial payment, of deposit money is lodged into a safe deposit account within 30 days of receipt, thus providing protection for the entire sum.