Magazine article The Spectator

Deposits Have Become a Tax on Tenants

Magazine article The Spectator

Deposits Have Become a Tax on Tenants

Article excerpt

As the kind of man who spends happy afternoons re-arranging his tea towels and dusting his bibelots, I laugh in the face of landlords' inspections, and now that my tenancy is ending it would stretch even an estate agent's inventiveness to place the least charge or lien on my £500 deposit. Wouldn't it?

The experience of two million private tenants suggests that I may rue my sanguinity. Nearly £800 million of tenancy deposits are held without statutory protection, and figures from the Office of the Deputy Prime Minister show that 127,000 tenants a year have more than £20 million unfairly withheld by landlords. Typically, it is claimed that tenants leave their rentals in such squalor that squads of tooled-up professional cleaners have to spend days up to their facemasks in elemental filth before a civilised state can be restored. To be sure, not everyone is as fond of Messrs Sheen, Ajax and Harpic as I, and there will always be moonlight flitters. But the confiscation of deposits has become so commonplace as to assume the character of a sort of informal tax.

'Tenants simply accept this loss as one of the hazards of renting,' says Ben Jackson, director of external affairs at Shelter. 'Tens of thousands of people lose out to this scam and are often forced into crippling debt to pay the next deposit.' In theory, cheated tenants can take landlords to the small claims court to recover sums under £5,000. But for most tenants the extraordinary fact that victory does not usually involve the refund of legal costs - added to the relative meagreness of the debt and the hassle of the process - means that the prize is not worth the effort. 'It is quite common for landlords to behave cynically in cases where a tenant doesn't have an inventory,' says property law specialist David Coffey of Lawson Cruttenden and Co. 'Expenses for work will be taken from the deposit, but invoices are rarely forthcoming and it is surprising how often landlords do the work themselves.'

Nor does the involvement of a letting agent guarantee that a tenant will be treated fairly. Barbara Shackel of Savills estate agents points out that loyalty is reserved to the client: 'Managing agents hold on to deposits and give them back to tenants on instruction from the landlord.' So, with the backing of dozens of MPs, the Consumers' Association and many other sonorous worthies, Shelter and Citizens Advice are urging the inclusion of a national 'tenancy deposit scheme' in the forthcoming Housing Bill. …

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