19th May 2004

The urgent need to safeguard tenants' deposits in the Private Rented Sector has finally been recognised by government just weeks after the ARLA Tenancy Deposit Scheme went live. While the government promised today (May 19th) to include measures in the current housing bill to require protection for deposits, consumer groups and tenants' rights organisations have already welcomed ARLA's Tenancy Deposit Scheme for Regulated Agents, TDSRA.

ARLA believes that there is well over £1 billion in deposits held in the Private Rented Sector that are not held by regulated agents.

The Scheme is to resolve deadlocked tenancy disputes over the apportionment and settlement of deposits following the end of a tenancy. When the letting agent is holding the deposit but cannot negotiate a settlement between landlord and tenant, all details of the dispute, along with the deposit money that cannot be settled, will be sent to the Independent Case Examiner for the Scheme. This will then be subject to expert third party adjudication and the apportioning of deposit money.

This breakthrough scheme, which replaces the scheme abandoned by government last summer, went live on May 1st and more than 300 ARLA members are already signed up. ARLA expects that the other two professional bodies; the RICS and the NAEA will join the scheme in the very near future. This is because it will greatly simplify the task of both agent and landlord as well as reassuring tenants that there will always be a fair deal through independent adjudication when they use agents signed up to TDSRA. Welcoming the Deposit Scheme, Shelter Director Adam Sampson said, "The ARLA Scheme will provide greater assurance to private tenants that their money will be held securely and returned speedily and fairly. ARLA's very welcome move needs to be backed by legislation to introduce a statutory default scheme for landlords and agents who fail to follow ARLA's lead in ensuring that the tenancy deposit rip off is ended once and for all."

Citizens Advice also welcomed the Scheme. Said Liz Phelps, Social Policy Officer, "Any industry Scheme needs to provide tenants with as much protection as a statutory scheme can deliver. The ARLA Scheme should provide tenants with a safe, fast and fair system for protecting deposits and resolving disputes with member compliance underwritten by ARLA itself. As such, Citizens Advice welcomes the Scheme that we believe should set the standard for any regulatory scheme," she added.

The Independent Case Examiner for the ARLA Scheme is Lawrence Greenberg, previously director of the original government-backed scheme. Each case will be assessed by one of a network of specially trained adjudicators, many of them drawn from the Rent Service, an executive agency of the Department for Work and Pensions. These adjudicators all have the relevant skills to draw on to assess disputes.

The Independent Case Examiner, operating as an Ombudsman, will then make a decision within ten working days and the deposit will be distributed no more than five days after that.

An independent, not-for-profit company, The Dispute Service (TDS Ltd), has been formed to manage the Tenancy Deposit Scheme. The company has been incorporated with an interim management board made up of professionals from the lettings industry, although the board itself has no role in the resolution of disputes.

Any regulated agent operating in Great Britain and Northern Ireland is eligible for the scheme if they belong to a professional body approved by the Independent Case Examiner. ARLA is the first professional organisation to achieve this status.

Said Adrian Turner, "Government has followed our lead because the Scheme is right for the industry and right for landlords, tenants and agents. It reinforces ARLA's commitment to promoting the highest standards of good practice in the Private Rented Sector and, yet again, the Association has led the way in providing the blueprint for regulation as well as quality standards."

Said Lawrence Greenberg, the Independent Case Examiner for the sector, "Independent, third party adjudication guarantees the return of tenants' deposits that are due, recompenses the landlord when that is due and removes the burden from the letting agents of having to resolve irreconcilable differences of opinion. We are happy to put our experience at the disposal of government."

For details of ARLA and Buy to Let and to find ARLA member letting agents and members of the ARLA panel of Mortgage lenders visit www.arla.co.uk or 0845 345 5752.

Full details of the new Tenancy Deposit Scheme are available on www.tds.gb.com

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