NEW DEPOSIT PROTECTION SERVICE A RECIPE FOR DISASTER
March 21, 2007 2:24 PM
From 6 April thousands of property landlords and letting agents across England will have 14 days to place new or renewal deposits with the Government's Deposit Protection Service. Non-compliance carries very stiff penalties including the invalidation of Section 21 Possession Notices. The DPS is designed to provide deposit security for all assured shorthold tenancies. At the end of the tenancy the DPS will return the deposit as appropriate arbitrating any disputes.
'Nick Harvey says: 'While I can see the merits of the Deposit Protection Scheme my biggest concern is that it will be run with the same kind of efficiency as the benefits system, the Child Support Agency, the Medical Training Application Service, the Rural Payments Agency and Tax credits to name but a few. The scheme was supposed to have come into effect last October.
'The fact that the DPS is to be funded through the interest accrued on the deposits held is a major source of concern. Apparently the landlord or tenant will get whatever interest is left over; I can't see either party being happy about this. I trust that the Government has got its calculations right otherwise I can envisage the DPS having to be bailed out with public money. I can also see the swift resolution of disputes being a major concern for both tenants and landlords
'I will be seeking assurances from the Secretary of State for Communities and Local Government that the DPS does not end up as the usual computerised shambles, say Nick Harvey. 'In particular from past experience the service provider must ensure that the helplines can cope and are responsive.'
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