Tenancy Deposit Protection
From 6 April 2007, all deposits taken by landlords for Assured Shorthold Tenancies in England and Wales, must be protected by a tenancy deposit protection scheme.
The Government awarded contracts to three companies to run tenancy deposit protection schemes from 6 April 2007.
How will deposit protection work in practice?
There are two types of scheme: a custodial scheme and two insurance-based schemes.
The landlord – not the tenant – will have the option to choose whether to safeguard the deposit in the custodial or insurance-based scheme.
A landlord will have 14 days to safeguard a deposit from the day he receives it. The landlord will have to provide the tenant prescribed information about the scheme safeguarding the deposit within these 14 days.
What happens if a deposit has not been protected?
Currently, a landlord can obtain an order for possession of an AST at any point after the first six months of the tenancy providing any fixed term has expired and the landlord gives the tenant at least two months’ written notice (Under Section 21 of the Housing Act 1988). This is known as ‘notice-only’.
However, under TDP, the landlord is unable to regain possession of the property using the usual ‘notice only grounds’, if the deposit has not been safeguarded and the prescribed information passed onto the tenant within 14 days of the landlord receiving it.
How will this affect deposits paid for ASTs which start before 6 April 2007?
The legislation will only apply to new deposits paid for ASTs entered into on or after 6 April 2007. Any deposit paid before this date will not need to be safeguarded by a tenancy deposit scheme.
What happens if the tenant renews their contract after 6 April 2007?
If the tenant decides to remain in their existing rented property beyond the initial fixed term of six months, how the deposit is treated will depend on how the tenancy is continued:
Periodic tenancy – i.e. the tenancy continues with no new agreement – TDP will not apply, as no new AST will have been created.
Replacement tenancy – i.e. a new AST is created between the same landlord and tenant for the same property on substantially the same basis, – TDP will apply to the initial deposit that was paid prior to 6 April 2007.
U-Seek have joined DPS, all deposits are held in their custodial scheme.
Regulations which commenced 6th April 2007, regarding the holding of bonds/deposits
For Let Only landlords who would have previously held their own deposits. We recommend DPS – The only custodial deposit scheme which if free to use.
The Deposit Protection Service (The DPS) is open to all landlords and letting agents, and is the only scheme that is free to use.
U Seek funds are passed on to DPS which is a safe, secure and straightforward deposit scheme in which Tenants have the ability to track and monitor their bond ‘on-line’.
|Landlords and letting agents can access online accounts 24/7 and submit deposits in minutes, allowing you to concentrate on doing business, not admin.|
|Free||The DPS is the only Government-authorised service without membership fees, application fees or per-tenant charges for protecting deposits.|
|Secure||Banking support for the service will be provided by Bank of Scotland’s Specialist Deposit Services team, who will safeguard and administer all deposit funds on behalf of Computershare.|
The DPS is also:
|Easy to use:||The DPS is specifically designed to be quick and straightforward. It is accessible online at any time, and also available by post. Help and advice is provided through dedicated help lines.|
|Inclusive||The DPS is open to all private landlords and letting agents, with no pre-conditions to meet or assessments to take.|
|Fair||An independent Alternative Dispute Resolution (ADR) service, run by the Chartered Institute of Arbitrators, will aim to resolve any disputes quickly and without the need for court action. Landlords, agents and tenants could also earn interest on any proportion of the deposit they are entitled to retain at the end of a tenancy.|
|Reliable||The DPS is managed by Computershare Investor Services Plc, a global business with more than eight years’ deposit protection experience.|
‘You can amend the information you hold, view the deposits you have submitted to The DPS, amend property or tenant details and request the repayment of a deposit at the end of a tenancy on this site.
To receive further help and advice, please call their dedicated helpline on 0870 7071 707
Alternatively, contact the scheme administrator at:
The Deposit Protection Service
Or: The email address is: firstname.lastname@example.org