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Lodged au Greffe on 23rd April 2002 by Senator C. Stein
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STATES OF JERSEY
STATES GREFFE
150 2 0 0 2 P . 2 Am d .
Price code: A
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Number the proposition as paragraph (1) and after the proposition insert the following paragraph -
“(2) to charge the Housing Committee to bring forward for States’ approval a scheme to safeguard the rental
deposits paid by tenants to landlords or agents in the private sector, and deposits paid by lodgers to lodging house owners and to ensure the prompt return of the monies at the end of the period of occupation.”
SENATOR C. STEIN
Report
The non-return of rental deposits is a common problem. Often tenants and lodgers face delays of weeks and in many cases the deposit is withheld altogether, with little or no reason given.
The Citizens Advice Bureau (C.A.B.) have many examples of this practice and, having been approached myself, I have uncovered much evidence with very little effort and, indeed, continue to receive complaints.
The only legal remedy open to the tenant or lodger seeking to recover her/his money is to initiate action through the Petty Debts Court. This takes a minimum of two weeks. In most cases people give up, either because they are returning to the United Kingdom or they feel disadvantaged as they are not used to a courtroom scenario, or because of the perceived or real threat of the landlord using a lawyer, and various other quite understandable reasons. Other Commonwealth countries have found solutions which work both for the landlord and tenant or lodger. These solutions are secure, self-financing and need little manpower. In Australia for example only two per cent of cases go to a local tribunal.
In the United Kingdom the National Audit Office has found that almost half of the respondents who obtained judgement in their favour in the small claims court had to take enforcement action, and of those, only about one third succeeded in recovering all or part of their claims. With the evidence the C.A.B., the Jersey Consumer Council and I have, it shows that we are little different than the United Kingdom and we have to accept that we have a problem, in particular where the pressure on the housing market is so much greater.
Where agents hold tenants’ deposits in separate clients’ accounts, they still have to obtain the landlord’s consent, which could be withheld even if the agent has agreed that there is no claim to be made on the deposit.
At present the absence of regulations leave the system wide open to abuse. It does not work in the interest of the landlord either, as it tarnishes the image of the private rented sector, and in case of a dispute the landlord will have the advantage of a third party adjudicating.
The Housing Committee had indicated that if a compulsory Tenancy Deposit Scheme is administered in-house, it will require approximately three Grade 5 clerical staff. Income generated from Scheme deposits would offset most of the costs, leaving a deficit of approximately £9,000 per annum before adjudication expenses. However, Mr. Brian Curtis , Chairman, Community Savings and Credit Ltd., in principle agrees that this body could administer the scheme, and if so, some economies could accrue from the work being combined with the Trust’s other functions. The proposition will have no financial or manpower implications for the States if the scheme can be outsourced in this way.