All deposits paid to landlords after 6 April 2007 should be covered by a tenancy deposit protection scheme. These schemes provide two things. The first is repayment of the deposit to tenants at the end of a tenancy less any agreed amounts for damages or shortfalls in rent. The second is a free service to sort out any disagreements between landlords and tenants without the need to go to court.
There are two types of scheme. In a custodial scheme landlords pay the deposit into the scheme and it earns interest. In an insurance scheme landlords keep the money but must pay a premium to cover the deposit.
Tenants should be given written details of the scheme used to protect their deposits within 14 days of taking a deposit. It is also good practice for landlords and tenants to agree an inventory covering the contents and condition of a property.
The agreed amount of deposit should be paid back to a tenant within 10 days. Landlords will need to advise a custodial scheme, which will pay the landlord and tenant the agreed amounts. In an insurance based scheme the landlord is responsible for paying any agreed amounts directly to the tenant.
When landlord and tenant disagree, any undisputed amounts will be paid and the schemes will retain the disputed amounts until an agreement is reached.
Landlords not joining a scheme will be fined three times the value of the deposit and will be required to refund the deposit to the tenant. They will also be unable to evict tenants using the "notice only" procedure.
This is a quick overview the legal requirements introduced on 6 April 2007 for tenancy deposit schemes. For more detailed information you should consult the organisations listed below.
Directgov : www.directgov.gov.uk/tenancydeposit
The Deposit Protection Service : Tel -0870 707 1707, website http://www.depositprotection.com/
The Tenancy Deposit Scheme : Tel - 0845 226 7837, website http://www.tds.gb.com/
Tenancy Deposit Solutions : Tel - 0871 703 0552, website http://www.mydeposits.co.uk/
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Last updated:
06 March 2008
