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Tenancy
Deposit Protection Schemes
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From
the 6th April 2007 all Security Deposits collected for new Assured
Shorthold Tenancies (AST) must be registered in a Government approved
tenancy deposit protection scheme within fourteen days of being
collected by the landlord or their agent.
The Schemes
Three different tenancy deposit protection schemes have been
established:
- The Deposit Protection Service (DPS) -
www.depositprotection.com or 0870 707 1707
- Tenancy Deposit Solutions Ltd (TDSL) -
www.mydeposits.co.uk or 0871 703 0552
- The Tenancy Deposit Scheme (TDS) -
www.thedisputeservice.co.uk or 0845 226 7837
The Deposit Protection Service is a custodial scheme
where
the entire security deposit must be paid into the scheme. The
other two are insurance-based schemes which enable the landlord (or
their agent) to keep the deposit by paying a fee to the scheme to
insure against their failure to repay the money due to the
tenant.
The Costs
The Deposit Protection Service is free to
use. The
charges for the Tenancy Deposit Solutions Ltd and the Tenancy Deposit
Scheme can be obtained from their respective websites
Choice of
Scheme & Timescales
The landlord, and not the tenant, can choose which scheme is used to
protect the security deposit and this must be done within fourteen days
of receiving the deposit. The landlord must also provide the
tenant with prescribed information about the scheme protecting the
deposit within these fourteen days.
Failure to
Protect the Security Deposit
If a deposit is not protected, the landlord will be breaking the law
and the tenant can apply for a court order requiring the deposit to be
protected, or for the prescribed information to be given to
them.
The court must also order the landlord to pay to the tenant (or person
who paid the deposit on his/her behalf) an amount equivalent to three
times the deposit Furthermore, the landlord will be unable to
regain possession of the property using notice-only grounds for
possession under Section 21 of the Housing Act 1988.
Dispute
Resolution
Each scheme will contain an Alternative Dispute Resolution (ADR)
service to avoid disputes having to go to the courts, although the use
of ADR will not be compulsory. When a dispute occurs, and if
the
landlord and tenant both agree to use the ADR service, they will be
bound by its decision with no recourse to the courts. Disputes will
only go to the courts if the landlord and tenant do not agree to use
the ADR service. The ADR service will be free of charge for
landlords and tenants.
Inventory
and Check-In / Check-Out Reports
All of the schemes recommend that an Inventory and/or Check-In /
Check-Out Reports exist for each tenancy and these (or similar
documents) may be required as part of the dispute resolution
process. Beckets can prepare Inventories and Check-In /
Check-Out
Reports for an additional charge. Please ask for details.
Further
Details
Full details of the schemes, and the ADR service, can be found at their
respective websites. Further information can be found on the
Government website at:
http://www.communities.gov.uk/index.asp?id=1152035
Different rules apply to tenancies that are not Assured Short-hold
Tenancies, and Assured Shorthold Tenancies that are being renewed or
continued. Details are available on request.
Beckets
and the Tenancy Deposit Scheme
Beckets Property Consultants will be responsible for placing all
security deposits for managed properties in an approved scheme as part
of the Letting and Management Package.
Landlords will be entirely responsible for placing all security
deposits in an approved scheme where Beckets Property Consultants have
provided the landlord with a Tenant Introduction service.
Information
provided by Beckets
Property Consultants regarding tenancy deposit protection schemes is
given in good faith and is based information supplied by the
schemes. Beckets does not accept any liability whatsoever for
any
errors or omissions.
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