I'm like the majority of small landlords in that I have opted to use the Deposit Protection Scheme (DPS) to protect my tenant deposits. Landlords have been required to place the tenants’ deposit with one of the approved schemes since April 2007,and that's who Ive tended to opt for.
My experience of the DPS
I've got to say that my experience of using the DPS website has been decidedly mixed. It's hardly iterative in the way that Amazon or increasingly bank websites are. I find the paying in of a deposit a real pain because for some reason,( possibly because I use a Mac and Firefox) the debit card payment system has never worked. I therefore have to resort to using the BACS alternative not impossible but not exactly 'easy flow', it's a pain!
Single & multiple deposits
The last time I used it having been forced to use BACS and having entered a single new deposit ,I wanted to add a second deposit before making any payment from my rental account.
The 'system' however seemed to require me to make a payment of that first deposit without allowing me to enter the details for the second deposit. Did I miss something? It then offered me the opportunity to set up a batch payment which implied a group of deposits without allowing me the chance to add the details of my final deposit. Confused? Am I the only 'numptee' landlord that has come up against this apparent impasse?
System needs to be idiot proof
The problem is that any system that you only use once in a blue moon needs to be idiot proof because even if you can find a work around - 12 or 18 months later can you really remember how you did it last time?
Repaying the tenants deposit
I also finally got around to finding a time to try and sort out the repayment of one of my tenants’ deposit. In the good old days the cheque would have been in their hand at the same time as the 'tenant check out'. To my shame it was now several weeks after they had moved out!
DPS process underwhelmed
I was already logged in from placing two new deposits with the Scheme. So I just followed the instructions to repay the deposit. Having gone all the way to the end of the process it required me to enter the tenants’ ID which obviously I don't have (It’s supposed to be sent to the tenant for them to use). The problem is the tenant doesn't have any record of it either. In fact none of my tenants seem to be aware of the ID despite me providing the DPS with their email address at the start of the process.
Why can't the system allow me to at least send as an email request to the tenant as a unilateral action? The tenant on receipt then would need to add in their ID to accept my repayment proposal. At least it would have moved the process on. Instead, I was left writing a personal email to the tenant explaining what I was proposing and effectively telling them to have a go themselves! Useful?
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What happens to the left over deposits?
After all this I'm left thinking there must be many tenants and landlords who just give up trying to extract their deposit, especially where there is little monetary value left in it. So what happens to these deposits? There must be a huge pot of abandoned tennats deposits sitting somewhere. Do they go to the government or does the DPS get to keep the money? In which case there seems to be a perverse incentive for the DPS to NOT operate a helpful system.
DPS needs competition
My impression is that because the Deposit Protection Service is the only custodial scheme licensed by the government - a monopoly in essence. They don't put the resources into developing their website that they need to make it truly easy to use. I'm sure a little bit of competition from another provider would just sharpen up their act. This would make using their website and managing our tenants deposits just that much easier. I'd be interested to hear about other landlords experiences of using the DPS website services. Could it really do with a little improvement or is it just me?
Please send your comments we do value them.
Why would any landlord want to use any other deposit scheme apart from mydeposits.co.uk
This is the only scheme that allows the LANDLORD to hold the monies and assist his cashflow and business and no one elses.
I have used mydeposits since deposit protection began and I've had no major problems with them. They have a new website now too which is easier to use than the old one.
I find the DPS procedure counter-intuitive also.
The required Terms and Conditions to give to tenants is logically in the documents section, but the Prescribed Information form is obscurely buried in the FAQs.
I have a tenant moving from one flat to another, and of course the original DPS account has to be shut down and the deposit actually paid out, before I pay it in again to start the new account. No means of simply transfering it from one to the next.
In relation to the above I agree with the comments made by Paul Barrett. My Deposits is an excellent scheme, is government approved and its website is easy to use. Also any queries raised are quickly and clearly responded to by e-mail.
Responding to you comments about the DPS.
I have found them confusing, arrogant, make lots of mistakes and blame this on bad training. The procedure and process is nothing less than painful! A tenant.
In response to the recent article in your magazine:
When our tenants give notice to leave, I post or email them a letter
reminding them where their deposit is (i.e. I DON'T have it), telling
them how to get their 5 digit number from DPS if they have lost it,
explaining they won't get it back until we have agreed bills owing,
and we have had the keys returned, and so on. Tenants still phone me
before they leave, saying 'Can't you just give it back before I go?'
but at least I can then remind them to read the letter. I keep a
standard letter on the computer, and just add the date they are moving
This takes a lot of hassle out of the process, and I have not had any
problem with using DPS.
As a first time user I fully agree with the very frustrating procedure for paying in the deposit.
For a BACS transfer it gives the sort code and account number but no bank details. Well none that I could find anyway (Bank name and Bank address), both of which my bank requires. In the end I had to get my son to make a debit card payment on my behalf as I only have a credit card,(Not acceptable) and no debit card.
The rest of the web site seemed OK, just the payment side has major user unfriendly aspects.
I haven't had to utilise the deposit repayment side yet.
Having never used anything other than MyDeposits I can't comment on other sites however the MyDeposits site is hardly the most user friendly, although the newer front end is much better.
Why not use the "my deposit" scheme? You hold the money, earn interest on the "pot" you hold, no sending money backwards and forwards, you are in control.
Yes there is a £30 fee to pay My Deposits which you cannot charge the tenant for, but nothing stops you applying an administration fee for carrying out this work as the scheme is mandatory.
Yes indeed, the DPS website is shoddy; badly designed, not user friendly and confusing to navigate. I'm a recent first time user. I stumbled across the info I needed to supply tenants with whilst looking for something else. The payment and allocation procedures were disjointed and vague and I feared for a moment that it was a scam site. The menu's are poorly worded and structure of the sight badly thought through. What should have taken minutes to sort out became somewhat lengthy, tedious and unconvincing. It should be kept simple but logical. It can't be that difficult to sort can it?
DPS is a non custodial scheme - like TDS - and it is the body which gets to keep any unclaimed deposit money. What got a TINY amount of publicity is that Kevin Firth CEO of DPS insisted when it was set up that if interest rates dropped, that he insisted on government funds to run the scheme... the original ideas was DPS was to be funded from interest acrued on the deposit monies. They are currently getting £20,000,000 a year of tax payers money .
I use Mydeps... i have much more control and its worth £30 to me for that alone.
I find the site not user-friendly at all. - Rashmi
I agree with most of what you say but would be surprised if many gave up on their deposits because of withdrawal problems.
Yes their money may have depreciated by the time of withdrawal but l have never taken less than £750 as a deposit and have never had anyone who could not be bothered to claim that amount of money.
I also find the DPS website confusing and unclear although I have managed to use it to make deposits for a small number of properties. I would also like to be able to contact them by e-mail if I have a query but have been unable to find an address to do so. I haven’t yet used the website to return a deposit although I have to say I’m not looking forward to it given the above comments! If this is government licensed you might think it would be more user friendly, seems to have been thrown together without much thought for the consumer and presumably with no testing procedure where some of the obvious glitches could have been fixed.
The drawback to using mydeposits as far as I am concerned is that it costs money so will have to struggle on with DPS.
We use DPS after switching from mydeposits.
What a lot of people don’t realise is that the £30 insurance fee has to be paid every time a tenancy is renewed or altered so it isn’t a one off fee. More importantly the reason for taking a deposit is to enable the Landlord to claim should there be any damage to the property caused by the tenant.
We found that if a tenant were to dispute any deductions then under the mydeposits scheme you need to just hand the deposit back to the tenant. The adjudicator takes no notice of the evidence that is put forward by the Landlord, (& before anyone mentions it, our Inventories are 30 pages long with each room fully described, photographed & the tenant signs each page agreeing the condition). All a tenant has to do is make any ridiculous statement or claim with no documentary evidence and it is taken as the truth despite overwhelming evidence. After a couple of claims like this, we examined the statistics of mydeposits and were shocked at what a small percentage of claims were found in favour of the Landlord. At the time of our investigation it appeared that the DPS found more than 3 times either partially or fully in favour of the Landlord than the mydeposits scheme. Whilst we would prefer to hold the deposit and just write a cheque at the end of a tenancy, when we are acting on behalf of other Landlords we need to protect their interests first.
I used to use DPS until I had to take a tenant to court for nonpayment of rent, I was given judgment and the tenant left on the day of the court hearing and returned the keys.
After inspecting the property, I found the property had been damaged by their dogs, poor DIY skills, rubbish left etc. to the tune of £1,200.
I filled in the DPS claim forms, provided photographic evidence and visited a solicitor to stamp the documents.
My mistake was sending them a copy of the court judgment, which they stated that as a court was involved they could not repay the deposit and I should have asked the court to authorize them to repay the deposit.
Despite explaining to them that until I was granted the judgment I could not enter the property to check if they had caused damage, all they did was quote a sentence from there T&C’s
My impression was that they just wanted to hang on to the deposit and they are definitely biased toward the tenant irrespective to damage or nonpayment, which is the main purpose of the deposit.
Eventually 8 months later I managed to persuade them to re-pay the deposit, although have not traced the tenant who still owes me over £3k.
Despite the cost I now only use My Deposits!
Hi - as a user of the DPS for the past three years, I have to say I have never had a problem with them. My client's tenants have also never highlighted any problems in requesting refunds and even when they have lost their repayment ID numbers, the DPS website has worked fine in sending out a replacement for them.
I only use internet banking/BACS payments for my business (it's the most convenient for sure) - in three years of trading I have only ever been asked once to accept a payment from a tenant via a card (credit card as it happened so a definite no-no - as it worked out it highlighted the fact that the tenant didn't have the financail means to actually pay the deposit so the application did not succeed in the end).
From my point of view with the DPS, both registration and refunds have worked beautifully and because it is a free service, it means I can keep my fees down for landlords and tenants rather than pass the costs on of the TDS for instance.
DPS gets my vote and I will continue to use them even if more competition is introduced.
Surely the point with using mydeposits is you have the money assisting your cashflow.
You don't have an issue obtaining any deposit monies for damages etc as YOU already have the monies.
Paying a fee is mandatory and I don't see how you can charge the tenant as if you as a LL don't protect the deposit in time you are at fault.
However if the tenant wished to have another AST they have to pay as there is no requirement to issue another AST as they may proceed onto a SPT.
If they want to adjust the AST the tenant pays.
If I choose to introduce a new AST possibly along with a rent increase I would pay for the new AST.
This obviously causes a fee every time.
I look upon deposit monies as an interest free overdraft whch assists my cashflow.
Obviously you need to ensure that the monies are available when you have to refund the deposit.
I have now given up on taking deposits. What I now do is charge rent in advance to be in my bank 2 days before it is due then add £100 for the keys, when I hand them over, (on the grounds that, if they do a runner, I will have to change all the locks). I return this £100 when they leave.
I find that it is a deterrent to doing a runner and to leaving the place in a mess. Not sure if it is legal but it seems to work.
I agree with your comments about the DPS website.
Having been faced with a dodgy Letting Agent, I extracted the deposit from them and lodged it with the DPS. The tenants then abandoned the property leaving a mess and rent arrears.
I don’t know where they have moved to.
I requested a return of my deposit explaining why I wanted the deposit to be returned to me. Weeks have gone by and the website has advised that they are waiting for the tenant to respond.I know the tenant won’t respond because they are no longer at the property and no one knows where they are. After several months I was then advised to initiate the scheme whereby the landlord can get the deposit back unilaterally –which is what I thought I was doing in the first place !
I’m still waiting.