Warning to landlords over rental deposits

LANDLORDS are being warned to ensure they, or their agents, are complying with the legal requirements surrounding property rental deposits if they want to avoid high penalties.

According to figures released from insurers, the number of matters relating to property rental deposits peaked at 25 per cent of all professional indemnity claims made by estate and letting agents in the first quarter of this year, up from just three per cent last year.

The claims most often relate to a landlord lodging a deposit late or failing to provide the correct information to the tenant.

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Under the Housing Act 2004, any deposit must be held by the landlord in a registered deposit protection scheme and the tenant must be given specific details. 

If a court rules that a landlord has failed in their duty, it can impose fines of up to three times the value of the deposit. 

'˜It's the landlord who will find themselves subject to the county court order,' said Jeremy Paterson, a property litigation solicitor at Verisona Law in Portsmouth.

'˜It's a costly business and bad in reputational terms for all concerned.' 

He advises landlords taking time to understand the law and having checklists.