Deposit Protection Scheme

chutzpahThu 25/08/11 19:10

Hello folks,

I've just signed a contract on a new house, and paid the deposit. The landlord has tried to add on a £50 'charge' for registering our deposit with the Deposit Protection Scheme.

I've had a look at the three services and none of them seem to charge anywhere near to £50 - one of them is free, another charges around £17 plus VAT, and another £30 inclusive of VAT. There's nothing to indicate he can't make a charge, but he said he was prepared not to register it if we were happy with that - obviously that's now illegal, and if he did try not to return our deposit we could take him to court (the contract does state our deposit is protected) so I'm wondering is it lawful to charge tenants for protecting the deposit (given it's a legal obligation)

dazbarThu 25/08/11 19:16

If I remember, the last time I rented, my landlord didn't charge my a fee- but it was done via an letting agent!

Are you going through private or agent?

agingdisgracefullyThu 25/08/11 19:25

According to advice.org ... Although the schemes are free to tenants, they have to be paid for somehow. One is funded by the interest on the deposits which are held by the scheme, and the other two by landlord membership fees. This cost may well be passed on to tenants in higher rents.

From what I understand, there is no facility available for landlords to make separate charges to a tenant for employing a deposit protection scheme, but it might be prudent to enquire from Cit Advice, as they are very more familiar than me with current DPS issues and have solicitors experienced in all aspects of the private rented sector.

#1635Thu 25/08/11 19:26

I'm not a lawyer, but I am a landlord. I don't know the specific point on charging a registration fee: I don't do it and I've not considered doing it. However, it is common practice for some landlords and some letting agents to charge tenants fees for finding the property, so I guess a fee is a fee is a fee, does not matter what it's called. On that basis I'm guessing it's legal, but interested to know if anyone knows otherwise for certain.

As for not registering the deposit, that is illegal whether you agree to it or not. Can't remember what the penalties are but they are very much in your favour.

You could call his bluff by saying you don't want the property if he won't waive the fee. Obviously that depends on how desperate you are to have it.

agingdisgracefullyThu 25/08/11 19:28

quoting > "t is common practice for some landlords and some letting agents to charge tenants fees for finding the property"

If it's the landlord, how could they justify charging for finding (their own) property?

#1635Thu 25/08/11 19:31

quoting > "If it's the landlord, how could they justify charging for finding (their own) property?"

Yes, indeed. Doesn't mean it does not happen.

Could be an 'admin fee'.

agingdisgracefullyThu 25/08/11 19:36

quoting > "Could be an 'admin fee'."

Yes, that old all-encompassing chestnut. Ha. An agent charging a tenant to find a property is somewhat akin to Asda or Tesco charging shoppers to locate a particular breakfast cereal. It's very unprofessional and I would certainly suggest staying clear of such agents.

chutzpahThu 25/08/11 19:38

We're not through an agent, it's directly with the landlord.

One of the schemes is completely free (the custodial one) which I think is the one you're referring to about it making money through the interest - the other two are the ones with fees significantly less than £50.

agingdisgracefullyThu 25/08/11 19:40

quoting > "We're not through an agent, it's directly with the landlord."

I would defo try CAB tomorrow to check out the legal position.