98% of Britons involved in the UK private rental sector do not know their rights surrounding tenancy deposits, according to a new study commissioned by Just Landlords.
The research has uncovered a worrying lack of knowledge on deposit law and private tenants’ rights.
Under the Housing Act 2004, all deposits on Assured Shorthold Tenancies (ASTs) in England and Wales must be protected in one of the three Government-approved schemes. If landlords fail to comply with the law, then they could be liable to pay the tenant up to three times the original deposit, plus the initial deposit amount.
However, when more than 1,000 Brits were asked how much a tenant can claim if the landlord does not protect their deposit, just 2% of respondents could identify the correct answer – up to three times the amount, plus the deposit. This means that a whopping 98% of Brits do not know their rights surrounding tenancy deposits.
Even more worryingly, of those aged over 55, 70% believed that the amount available to a tenant was the full amount, plus the deposit. This means that some of society’s most vulnerable renters are not fully aware of the correct legislation, which means that they may be taken advantage of by rogue landlords.
Landlords are also being reminded to comply with the law, otherwise they could face significant payouts to their tenants.
Just Landlords’ sister site, Landlord News, has a helpful guide for understanding tenancy deposit law – click here to read it for free.
Just Landlords also asked respondents where a tenant’s deposit should be kept during the duration of a tenancy. Two-thirds (66%) did not know the right answer – with a Government-approved protection scheme – while, for those aged 18-24, the number of correct responses dropped to 16%.
This is a worrying statistic, given that 65% of those aged 16-24 live in rental housing, potentially exposing them to missing out on money that they are legally entitled to.
8% of respondents thought that the deposit was held in the landlord’s personal bank account, while 24% believed that the letting agent looked after it.
Off the back of the PPI scandal of recent years, Just Landlords wondered whether attitudes towards consumer rights have changed, and whether or not Brits are more or less likely to look into proper processes now.
37% said that it had not made any change in their attitude towards their consumer rights, while 74% said that the PPI scandal hadn’t changed their awareness when it came to reading the terms and conditions of a signed agreement.
Rose Jinks, Just Landlords’ spokesperson, says: “It’s shocking that so few people understand their rights when it comes to tenancy deposits, especially as more people than ever rent from a private landlord. We believe that the companies currently seeking PPI compensation for consumers may turn to unclaimed tenancy deposits when the deadline comes into force in August next year.
“Tenants may find that they could claim back three times their deposit, plus the original deposit amount, if their landlord didn’t comply with the law, while landlords could be faced with a significant bill. We urge all of those in the private rental sector to understand their rights and responsibilities surrounding tenancy deposits.”
Why not give it a try?
Learn more about how Arthur Online uses the latest technology to save property managers time and money.
Book a Demo with one of our highly rated customer support team.
Keep an eye out for Arthur Online’s blog and our social media for the latest property news!