Tenancy Deposit Schemes - Information on the tenant deposit protection scheme

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assured shorthold tenancy agreement.

From 6 April 2007, all deposits taken by landlords for assured shorthold tenancies in England and Wales (the majority of tenancies), must be protected by a tenancy deposit protection scheme.

Landlords will have to participate in either a ‘custodial’ or ‘insured’ scheme and provide tenants with the contact details.

In the custodial scheme the tenant pays the deposit to the landlord who within 14 days must pass this on to the scheme. Also within 14 days the landlord must give the tenant the prescribed information (to be set out in secondary legislation) about the scheme being used.

At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme what they have agreed and the money will be paid out accordingly.

Should there be a dispute over the deposit, the scheme will hold the amount until the dispute resolution service or courts decide what is fair.

Interest accruing on deposits in the scheme will be used to pay for its running and any surplus will used to offer interest to the tenant, or to the landlord if the tenant is not entitled to repayment of the deposit.

In the insurances schemes the tenant pays the deposit to the landlord who retains this amount. However, the landlord must pay a premium to the insurer.

Again the landlord will be required to provide the tenant with prescribed information about the scheme within 14 days of taking the deposit.

At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit. Should there be a dispute the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.

If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.

Both custodial and insured schemes feature alternative dispute procedures that can be called on to settle disputes.

In November the Government announced award of contracts to run the custodial scheme and two insured schemes – one aimed primarily at agents, and the other at private landlords.

Computershare Investor Services plc will run the single custodial deposit scheme, with the Chartered Institute of Arbitrators providing the Alternative Dispute Resolution (ADR) service.

The Dispute Service Limited will run an insurance-based scheme directed primarily at letting agents. It will also run the scheme’s ADR service.

Tenancy Deposit Solutions Limited will run an insurance based scheme, sponsored by the National Landlords Association and administered by Hamilton Fraser Insurance, which will be directed primarily at landlords. The Chartered Institute of Arbitrators will be the principal provider of ADR to the scheme.

Computershare has administered a custodial tenancy deposit scheme in the Australian State of Victoria for the past eight years.

The Dispute Service Ltd was established in 2003 to provide dispute resolution and complaints handling services to the lettings industry. It is backed by the three professional bodies that are active in the private rented sector: the Association of Residential Letting Agents, the National Association of Estate Agents and the Royal Institution of Chartered Surveyors. It handles complaints for ARLA and NAEA as well as currently running the voluntary Tenancy Deposit Scheme for Regulated Agents www.tds.gb.com for some 2,000 self-regulated lettings offices.

Hamilton Fraser Insurance, which specialises in property insurance, is an NLA commercial partner offering its members discounted landlord insurance. The NLA has set up a dedicated website, Mydeposits.

Download a low cost professionally written
assured shorthold tenancy agreement.

Residentiallandlord.co.uk - tenancy deposit scheme news

Slow take up on deposit protection
More than three out of four landlords have not registered for Tenancy Deposit Protection, the government-approved tenancy deposit scheme, says the National Landlords Association. Around 150,000 landlords have registered with a scheme, but a large majority...

Little early support from landlords for deposit protection schemes
For Two thirds of landlords and lettings agents have said they are negative (37.6 per cent) or indifferent (33.7 per cent) to the introduction of mandatory deposit protection. But ‘first indications are that a third of all tenants are aware of the introduction of tenancy deposit protection schemes and their response to the...

Agents sign up to tenancy
deposit scheme alternative
Iguarantee, the alternative to tenancy deposit protection schemes, has already signed up its first letting agent associate. Using the revolutionary no deposit Tenant Guarantee Scheme launched last week, the Barry firm Just4Let will advertise lettings with no deposit, signing up all tenants to the scheme which brings...

Deposit protection comes into effect
As of 6 April, landlords who take deposits when granting assured shorthold tenancies must ‘protect’ those deposits through participation in one of three Government approved schemes. According to Government estimates, the average deposit paid is £700. In 2005/06 11 per cent of tenants did not get their deposit back and barely one in five received the whole amount back.

Warnings on TDS rules: and a viable alternative
There is not enough awareness of the Introduction of tenancy deposit protection rules on 6 April, leading independent letting agent Leaders has warned. This is one of the most important changes to residential letting in the last 20 years and will affect all landlords who put new assured tenancy agreements...

No cost, no hassle answer to new tenant deposit rules
Landlords worried about the high cost and bureaucratic burden of complying with new tenancy deposit protection rules are being offered a revolutionary solution. Residential Landlord has teamed up with Letcare to offer the Tenant Guarantee Scheme.

Tenants targeted as landlords pay up to £95 for deposit protection
Landlords who use the 'insured' option to protect tenancy deposits will have to pay up to £95 for the privilege. This became clear when Tenancy Deposit Solutions - the version of tenancy deposit protection backed by the National Landlords Association - at last announced its fees structure.

NLA warns landlords on deposit protection rules
With just 50 days to go before the introduction of mandatory tenancy deposit protection some 800,000 residential landlords across England & Wales should be preparing now for the 6 April start date, the National Landlords Association has warned.

Deposit protection is on track for April start
Claims that the start of the Tenancy Deposit Protection Scheme is to be further delayed have been rubbished by both Department of Communities and Local Government and the National Landlords Association which is to run the ‘insured’ scheme likely to be used by most landlords.

In brief
A warning to landlords to be ready for new deposit protection rules - the last major provision of the Housing Act 2004 to come into effect - has come from the National Landlords Association. 'The repercussions of non-compliance are severe', said NLA chairman David Salusbury.

NLA chosen to head landlord deposit scheme
Activation of the delayed requirement for rental deposit protection moved a stage nearer this week with announcement of the names of the firms authorised by the Government to run deposit schemes.