Since April 2008 it has been necessary for shorthold tenancy landlords to either take out an insurance policy to protect a tenants deposit or to send the deposit to the Deposit Protection Service. It is the landlord, not the tenant, who has the right to choose one of these methods.
The Deposit Protection Service is free, financed by interest from the deposits. One of the 2 insurance options is expensive and the other is very expensive so most small lanlords will opt for the free service.
Until this law the landlord and tenant had the right to agree thet the deposit would be retained by the landlord as a bond to cover repairs or non payment of rent so if no such expenses occurred the tenant could have the rent back on the day he moved out and it was immediately available to be used for his next home.
Now the tenant has to wait 10 days and a request for the deposit has to be sent by the landlord and tenant to the DPS if there is no dispute. In the meantime some tenants will have to borrow for their next deposit.
Is it not the case that the deposit is at all times the property of the tenant and so the government and the law have no right to interfere with how he wishes to use it and who he wants to hold it as long as the purpose is not illegal?
If this is the case then could making the use of the scheme compulsory be overturned by appeal to a High Court or a European Court as the law deprives the tenant of the right to do what he wants with his own money?
I am aware that the intention is to protect tenants money but I question whether it is legal to force tenants to accept the scheme when it should be the tenants right to decide.
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