Citizens Advice calls for law on rental deposits

But Guernsey Private Residential Landlords Association chairman Jeff Guilbert said he did not think such a scheme would achieve much, instead saying that renters should take landlords to the Petty Debts Court in the rare cases where they had to fight to get their deposit back.

The report said that although the majority of landlords treat their tenants fairly and with respect, there is no legislation in place to protect tenants from those who do not, and set legislation would also protect landlords from damage and potential financial loss caused by tenants.

To collate the report, CAG drew on the experiences of 62 of its clients who had approached the service in 2021 with concerns about rental deposits.

Of those, 38% were seeking advice because of concerns that there would be an issue with their deposit, and 18% felt the amount they were being charged for damage, repairs or replacements had been upped and they were not offered an invoice to justify the expenses.

‘It’s pretty distressing with the price of rent in today’s market, people need and rely on those deposits.

'It costs money to move, no matter how frugally we do it. People often don’t anticipate not getting back something they are owed,’ said CAG chief executive Kerry Ciotti.

The report suggests two approaches to legislation. One being a deposit protection scheme based on the Landlords Guide to Residential Lettings and Code of Good Practice.

It was also suggested that a law could follow Jersey and the UK, which use independent deposit protection services.

In Jersey, Mydeposits is used by tenants and landlords. It ensures that deposits are protected if the landlord goes out of business, if there is a claim against the service or if there is a banking failure. Landlords are required to input deposits within 30 days of receiving it or pay a fine of up to £10,000.

‘In the UK and Jersey it works well, it gives a sense of security to both parties that they will get back what they deserve. It provides protection for everyone and it raises the level of expectation in what can and can’t be rented out.

‘It does happen, but we are only seeing a snapshot of it. I’ve been working here for 14 years and it’s a phone call we have been having for all those years,’ said Mrs Ciotti.

Mr Guilbert said that although deposit schemes were easy to use and reasonably priced, they do not achieve much.

‘It will stop money from being taken away, but no one is running away with deposit money. You can access it, but people can’t be bothered to go to Petty Debts.

‘Most tenants find it daunting and arduous to go to Petty Debts when it’s not. It’s reasonably priced within the means of the working man.

‘Some may not go because they are barred by an arbitration clause. Some landlords may put an arbitration clause in to stop tenants from going to petty debts,’ he said.

He added that if Guernsey was to use the scheme, potentially £10m. worth of deposits would be sitting overseas.

‘We should be setting something up over here for the good of the people in the island. If we had a Mydeposit in Guernsey it would mean funds stay in the island and any interest could go part way to funding dispute resolution.

‘Overall it is a good report. It gives an option in there, and as long as people put the nuts and bolts to the laws and if they can take it on board it would make the introduction of law more palpable,’ said Mr Guilbert.