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Deposit protection in Northern Ireland goes live on 1 April 2013

Monday 25th March 2013

Existing landlords or those investors thinking of acquiring buy-to-let properties in Northern Ireland are being reminded that the new tenancy deposit protection law in Northern Ireland comes into play on 1 April 2013.

But with less than a week to go until new tenancy deposit protection laws are introduced, research shows that many landlords and letting agents are not ready for the new tenancy deposit protection laws.

Some 77% of letting agents polled by the Letting Protection Service Northern Ireland (LPSNI) say they do not believe that landlords or letting agents are prepared for fast-approaching legislation.
From April 1 landlords and letting agents in Northern Ireland will be required by law to register a tenant’s deposit with an approved tenancy deposit scheme within 14 days of receiving it.

LPSNI director Kevin Firth said: “This result is a wake-up call, and shows how much still needs to be done by landlords and lettings agents to get ready for 1 April.

“Registering is not a complicated process at all. But it is important because there will be sizeable on-the-spot fines for not protecting deposits.

“It will mean a new way of working, so there are new things to learn ahead of the implementation date.

“If landlords or letting agents have questions they should call us, or visit our website where all the information they need will be there for them.”

Some 92% of respondents were aware the new rules were on their way. Just over half, 51%, believed it would help the rental trade in Northern Ireland but 77% said they didn’t think the industry would be ready in time for the change.

Landlords and letting agents can chose to protect their tenant’s deposit money in either an insurance-based or custodial scheme. The Department for Social Development announced a list of approved deposit protection suppliers on 4 February this year.

Custodial: landlord/agent hands the deposit over to a third party to protect during the tenancy, then either party can apply for repayment at the end of the tenancy. This scheme is funded entirely from the interest earned on the deposit pool.

Insured: Here the landlord/agent gets to retain the deposit but in return pays a protection fee to the scheme. If the landlord/agent fails to return the deposit to the tenant at the end of the tenancy then the tenant can apply to the scheme for repayment. The scheme takes out insurance to cover this risk and is reimbursed accordingly.

              

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