The legislation requires landlords to hold a tenant’s deposit in a separate account which isn’t managed by them; either by placing the money in an insurance policy or with the government.
However, many within the buy-to-let industry believe that TDS won’t come into force in October as the foundations have not been laid and landlords are largely unaware of its implications.
Lynsey Scrivener, marketing and PR director at The Money Centre, said: "The scheme is supposed to launch in October but there is no meat on the bones in terms of procedures or criteria. We were at the Eastern Landlords Association’s AGM and the company which presented information about TDS to the members said they couldn’t tell us much because they didn’t know a lot themselves.”
It was also claimed the government has rejected all the bids by various companies to hold deposits. However, this was refuted by the Department for Communities and Local Government (DCLG), which said there were three major financial companies currently being assessed for the role.
Simon Tuke, owner of The Oaks Letting Agency Ltd, said: “The government hasn’t fully understood what it is doing yet and in reality it is a piece of legislation which is a cure-all for something that isn’t wrong. Nobody has been informed how and when it is going to be introduced and who is going to administer it.
“The only way it can be fairly administered if there is an independent inventory agreed by the client and the landlord which can arbitrate in any dispute between the landlord and the client.”
A government spokesperson commented: “The actual legislation was in the Housing Act 2004 but it is just the administrative side that still isn’t sorted. There is still a start date of October 2006 but we are looking at it so watch this space.”
