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Tenancy Deposit Reform

The Ministry of Housing, Communities & Local Government (MHCLG) has launched a call for evidence to explore innovative approaches to deposit protection and look at improvements to the way the deposit protection process works.

One of the issues that the MHCLG appears to have identified is the length of time it takes for some tenants to receive their deposit back when their tenancies end. The MHCLG argue that tenants who have not received their deposit back from a previous landlord often turn to high cost credit to pay it to their current landlord. This means that some tenants risk falling into debt or that the whole process as it stands is a barrier to tenants looking for alternative accommodation.

The MHCLG acknowledges that they do not know how significant, if at all, this problem with the deposit being returned late actually is. For that reason, it seeks evidence from contributors on this specific issue. The MHCLG seeks views on implementing a deadline for the return of a deposit to ensure that parties are more proactive about resolving any deduction dispute quickly.

Deposit affordability initiatives are discussed such as deposit replacement products and employer backed loans. The MHCLG seeks evidence on how well known these schemes are and what the uptake of them has been. The answer to these questions may lead to the MHCLG seeking to implement improved initiatives or increase the awareness of the schemes if the awareness is lacking.

Finally, the other issue that is being considered is whether improvements need to be made to deposit protection generally so that it works effectively. The two specific issues raised are whether the dispute process needs improving and if the prescribed information a landlord must provide is appropriate. Put simply the MHCLG seeks views on whether the dispute process needs to be made optional and whether parties understand that they have a right to appeal a decision. With the prescribed information, the MHCLG seeks views on whether the information needs simplifying and raises concerns that tenants may not be reading or understanding the information.

Deposit protection has been raised as a possible barrier to tenants moving and securing alternative rental properties so it is possible that changes may be on the horizon. However, with Brexit taking over most of the government’s time and this call for evidence closing mid-September it is unlikely that we will see any changes this year. For those in the private rental sector a response to these questions may be worthwhile especially for those that are unhappy with the current system.

Published 4 July 2019

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