The loophole that puts tenants’ deposits at risk

Since 2007, tenants are supposed to have had peace of mind when handing over the best part of a month’s wages at the start of a tenancy, with a government-backed deposit protection scheme. But Channel 4 News reported tonight that it’s possible for a landlord to hold on to the money, then get barred from the scheme and make off with their tenants’ money.

The scheme’s chief exec and the chair of the National Landlords Association say the scheme works for landlords, but it quite clearly didn’t work for the 160 tenants who saw their money disappear. The deposit protection scheme simply won’t protect deposits until this loophole is closed. We’re calling on the government to review the scheme, and for the NLA to pay back the money that isn’t protected.

Channel 4’s subject, Daniel Burton, rented flats from the owners only to sublet rooms to tenants, and is now running letting agents. His case serves as a reminder of the need for a register of landlords – and mandatory licensing of letting agents.

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