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Mar
30
2007
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Tenancy Deposit Protection Easy GuideCategory: Landlord Advice
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Here’s a quick and easy guide to the MANIDTORY (for all landlords and letting agents that hold deposits) tenancy deposit scheme introduced on April the 6th 2007.
Who does it apply to?
The scheme applies to EVERY landlord and letting agent in England and Wales where a deposit has been taken after the introduction date, 6th April 2007.
What is it?
It’s a scheme that essentially protects a tenants deposit; it’s a fancy term for “tenancy insurance”. In the past there has been a high number of disputes in regards to the security deposit. A lot of cases emerged where tenants thought their deposit was being taken away from them unfairly. There are currently three schemes (insurance companies/moderators, whatever you want to call it) that a landlord can join, and they will act as the middleman.
How does it work?
The tenant will pay the deposit to the landlord, and he/she will hold it. Before, some letting agents would hold the deposits; that practise is no longer with in the boundaries of the law. Once the landlord has received the deposit, the landlord should inform the admin of the scheme and assign protection to that tenant’s deposit. At the end of the tenancy shorthold contract the landlord and tenant will agree what happens to the deposit. If the tenant is dissatisfied and complains to the scheme administrator, the landlord will be required to lodge within a set period of time the disputed amount with the Scheme Administrator. When the dispute is resolved, the lodged money will be repaid to the landlord and tenant in accordance with agreement.
What if I disagree with my tenant, and I refuse to give back the amount that the scheme requests?
If nothing can be settled, the tenant will need to obtain a court order.
You can sign up at one of these places:
The Deposit Protection Service (The DPS) - www.depositprotection.com
Tenancy Deposit Solutions Ltd(TDSL) - www.mydeposits.co.uk
The tenancy Deposit Scheme (TDS) - www.td.gb.com
Aims of the scheme:
1. to ensure good practise in deposit handling- when a tenant pays a deposit, they can be assured they will get it back.
2. to assist with the resolution of disputes regarding the security deposit
Why do I have to do it?
Because it’s the law, and you can be taken to court and fined 
Do I still keep the security deposit?
Yes, you still keep the security deposit; you don’t need to give it the tenancy deposit scheme organisation.
Does it cost anything?
Yes, I’m afraid so. There is an initial sign up fee (regardless of which scheme you use), and then a yearly top up on top of that. From what i’ve seen, it costs about £50 to sign up, £30 for the Deposit Protection Fee (per deposit incl. VAT) and an annual membership renewal fee of about £15. of course, these will vary, and
may change in price over time.
Here’s an in-depth overview Tenancy Deposit Protection Scheme (in pdf format) by the government.
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