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Catch up with the latest press releases from LV=

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Lawbreaker Landlords

Press release: 12/09/2008

Thousands of landlords have failed to join a tenancy deposit protection scheme, leaving up to £4 billion of renters' deposits at risk, according to new research*.

The findings, from home insurer LV=, have revealed that close to a third (29%) of renters who have moved in the last 12 months are not part of a tenancy deposit protection (TDP) scheme. This is despite it being a legal requirement for landlords to ensure tenants' deposits are protected by the Government approved scheme.

Introduced in April 2007, the TDP scheme was set up to ensure that tenants' deposits are not wrongly withheld at the end of a tenancy. The LV= research found that half of current renters (48%) are unaware that such a scheme exists, and a further 24% said they had heard of the scheme but didn't know any details of it.

All rental properties where a deposit has been taken since April 2007 are legally covered by the scheme, yet among private renters just a quarter (27%) say their landlord is signed up. This means thousands of tenants could be at risk of having problems getting their deposit back, with over three-quarters of renters (77%) saying they have previously had some or all of their deposit money unreasonably withheld. The average deposit taken by landlords in the last 12 months is £670, so the potential loss is considerable.

As a result, some tenants appear to be taking the law into their own hands. 13% of private renters surveyed said they had refused to pay rent towards the end of their contract, because they expected problems to arise with the return of their deposit.

Under the TDP scheme, landlords must sign up with one of two schemes run by three Government approved financial companies. In the ‘custodial scheme', the landlord pays the deposit to the scheme for safekeeping, and in the event of a dispute independent adjudication will decide who receives the deposit money.

In the 'insurance scheme' the landlord retains the deposit and pays a premium to an insurer, who will return the money to the tenant if the landlord does not comply with the adjudicated outcome of any dispute. With both schemes, landlords have 14 days from the date the deposit is taken to inform their tenant of the scheme details.

The LV= survey also revealed that 40% of people living in private rented accommodation don't have any home contents insurance in place, despite the fact that rented properties are more prone to being burgled. Also, of those that do have home insurance, only 10% have a policy that includes a legal advice helpline, which could be used in the event of a dispute with a landlord.

John O'Roarke, Managing Director of LV= home insurance, said:
"This research highlights the need for the Government to raise the profile of this legislation and for it to be more strictly enforced, to protect both renters and landlords, as awareness is currently very low. Although the majority of private landlords are undoubtedly honest, our research shows that many tenants have experienced problems getting their deposit money back in the past, and are worried this could happen again.

"The average deposit is over £500, which is a significant amount of money, so renters need to make sure they know their rights. Renters should also always ensure they have home contents insurance in place, as not only are they more likely to be burgled than home owners but some polices will include a legal advice helpline, which could be used in the event of a contractual dispute."

LV= offers the following tips for renters to help ensure they get their deposit back:

1. When you first move in, make a note of any existing damage, such as marks on the carpet or walls, and ensure your landlord agrees that the damage already exists.

2. Ensure you have an inventory and carefully check that it corresponds with all the items in the property.

3. Ensure you have a home contents insurance policy that includes a legal advice helpline, in case of any problems, and accidental damage cover so if you do cause any damage you can claim.

4. Give the property a good clean before you leave and take any rubbish away. Meet your landlord at the property so you can run through the inventory and any damage before you leave.

5. Ensure all communication with your landlord is in writing throughout your tenancy.

6. Be aware that a certain amount of wear and tear on a property is to be expected and your landlord cannot withhold your deposit for this reason alone.

7. Consider carefully whether to accept a cheque for the return of your deposit as it can be stopped by the landlord after issue.

8. If you have taken all the steps above and your landlord is still withholding your deposit, and you are not part of a tenancy deposit scheme, obtain legal advice from your insurer or the Citizens Advice Bureau ( ).

For more information, log on to or and search for tenancy deposit schemes.

The research was carried out on behalf of LV= by YouGov. A nationally representative sample of 1193 private renters were questioned online between 22nd to 25th July 2008. Results are weighted to be representative of the UK adult population. YouGov is a member of the British Polling Council.

*Population of the UK is 45,434,897. 12 percent of people in the UK are private renters = 5,452,187 tenants. 37 percent moved in the last year = 2,017,309.
29 per cent of these say they don't have a tenancy deposit scheme in place, which means the deposit money of 585,019 renters is at risk.
The average deposit taken for properties rented in the last 12 months is £679.
585,019 x £679 = £397,228,315 (£4 billion) at risk.