Jersey Landlord/ Tenant Disputes--- Tenancy Deposit Scheme

On 28th June last year I published a blog in relation to a dispute between a landlord and tenant and how expensive and cumbersome it was for the tenant to seek redress when clearly the land lord had acted in an unseemly manner.

When I published the blog, unlike the UK, Jersey did not have a rental deposit scheme, however as a result of the States approving P111/2014 today steps are now in place to implement the provisions contained within the Draft Residential Tenancy Deposit Scheme (Jersey) Regulations 2014. (Regs)

The (Regs) introduce rental deposit protection for residential tenancies in Jersey and will provide a simple framework to assist landlords and tenants in the management of deposits.  The Minister's objectives are to-

* reduce the number of unfairly withheld tenancy deposits

* ensure the safekeeping of deposits throughout the period of tenancy

* ensure deposits are returned swiftly and fairly, particularly if a dispute arises

* encourage continued improvements in property management standards

The (Regs) will affect all new, varied or renewed residential tenancy agreements made on or after the date on which the deposit scheme comes into force. However if landlords wish to join the scheme voluntarily before then they may do so.

In future if a landlord requires a deposit there is now an obligation to pay the amount to the scheme within 14 days of its receipt. The deposit will be held in a dedicated account by a scheme administrator until it's repaid at the end of the tenancy. If there is a disagreement over the amount of money to be returned, the (Regs) provide for the scheme administrator to establish a dispute resolution service, which will adjudicate on the apportionment of money to be repaid to the tenant and/or landlord or managing agent.

It will still be open to tenants, should they not agree with the adjudicator, to refer the matter to the Petty Debts Court. 

The (Regs) provide for the Minister to appoint a scheme administrator to establish and maintain the tenancy deposit scheme who will be responsible for making arrangements for the scheme to take effect and determine the rules by which it will operate. At the same time the administrator must ensure that the scheme meets the provisions specified in the (Regs) and follows the directions of the Minister.

The administrator will need to be appointed and the necessary arrangements put in place before the scheme can begin but it is anticipated that it will come into operation by 28th February next year. To this end the Minister had lodged an amendment giving his commitment to meeting that date.

In addition to the deposit scheme a compulsory property condition report will be introduced. The Report will ensure that an accurate record of the condition of a property is available either in a visual or written form, of the physical state and condition of a property at the beginning and end of a tenancy agreement. This will provide evidence when determining the amount of deposit to be retained by a landlord or repaid to a tenant, and can be referred back to in the event of a dispute arising.  

The proposition contains a number of interesting facts such as 46% of households in Jersey live in rental accommodation. 32% of these households are in the private rental (qualified or non qualified sector) . This equates to 7,800 households in qualified accommodation and another 5,600 in the non-qualified. To live in the qualified sector one is expected to have lived in Jersey for a minimum of 10 years.

it is estimated that the total amount of deposits held by private landlords at any time in Jersey is £15 million.  The money on deposit will be held in one or more dedicated scheme accounts and an investment strategy for the funds will be implemented which fund the scheme. However until there are sufficient funds in the scheme, a small fee may be charged to cover the initial costs.

The Jersey Statistics Unit estimates that the average rent for a mid-range property at the end of 2012 was £1,144 per month, roughly equivalent to the average deposit of one month's rent. It should be noted that Landlords are entitled to claim 10% of the rent received from the Income Tax Department for "fair wear and tear."

I mention this because there are some landlords who expect their property being returned in the condition they let it. This was the case that I referred to in my previous blog on the subject. I attach a blog site published by My/Deposits.co.uk which is a guide for landlords in relation to tenancy deposit protection. Interestingly the editor of "My Deposits" is of the view that there are no rules as to what is reasonable wear and tear, however the site provides some useful pointers which will be helpful to both landlords and tenants.

It is generally recognised that the majority of landlords and tenants behave in an honourable way. Unfortunately life is not perfect and for that reason the tenancy deposit scheme should go a long way in addressing some of the unsavoury behaviour by those few landlords who give their colleagues a bad name.   

The Draft Residential Tenancy Deposit Scheme (Jersey) Regulations 2014 has taken many years to become Law. I can recall my time on the Housing Committee in the mid 1990's when the idea was first mooted. The reason why it has taken so long time in coming says little for the past Housing Ministers, however the present Minister Deputy Green cannot be put in the same pot.

The (Regs) are not perfect and it would appear that tenants in Lodging Houses may not have the same protection. Hopefully this matter and any other teething problems will be speedily addressed, however the (Regs) are a vast improvement on the existing arrangement.

Readers who wish to read my previous blog in relation to landlords and tenants may do so by CLICKING HERE

Readers can read Proposition P111/2014 by CLICKING HERE

The amendment can be read by CLICKING HERE

Readers can read the My Deposits co.uk website by CLICKING HERE