UK Rental Contracts in the Employer's Name
Are your Deposits Subject to Government Protection?
If your company is taking UK rental contracts in its own name for employee accommodation, the deposits may not be subject to any protection by the government-mandated deposit protection schemes even though the legal documents may lead you to believe otherwise. You may be misled into believing that the deposits are protected because the form of rental contact (used by the landlord or rental agent) may say that the deposit is protected when it’s not.
In such cases, where a dilapidations dispute arises, you will likely be faced with a situation where the relevant Tenancy Deposit Scheme’s custodian [Deposit Protection Service (DPS), My Deposits or Tenancy Deposit Scheme (TDS)] will refuse to adjudicate (because the tenant is a company) and you will have to go to court to force the landlord to return the deposit. Not good!
For this reason, it’s best to make sure that rental contracts taken in the name of your company have, instead of the standard deposit scheme language, a simple ADR clause whereby the parties, in the event of a dispute, agree to adjudication by an independent expert.
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