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Tenancy Deposit Schemes


From 6 April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords and letting agents for Assured Shorthold Tenancies in England and Wales, must be protected by a tenancy deposit protection scheme.


Two types:

Purpose: The schemes allow tenants to get all or part of their deposits back when they are entitled to it and encourage tenants and landlords to make clear arrangements prior to the tenants moving in with regards to the status of the property.


Insurance Based Schemes (TDSL; TDS)

The tenant pays the deposit to the landlord or agent, who then retains the deposit and pays a premium to the insurer. Within 14 days of receiving a deposit, the agent or landlord must give details to the tenants how the deposits are protected. (i.e. The contact details of the tenancy deposit scheme selected; the landlord’s or agent’s contact details; how to apply for the release of the deposit; information explaining the purpose of the deposit; what to do if there is a dispute at the end of the tenancy)

At the end of the agreed term of the tenancy, the landlord or agent must return all the deposit, or a part of it. In case of a dispute the deposit needs to be transferred to the insurer, and they safe keep all the monies until the dispute is solved. If the landlord fails to return the deposit, the insurer gives the tenants what is fair, and then charge the landlord.


Custodial Scheme (DPS)

The tenant pays the deposit to the landlord or agent, who then pays it into the scheme. (This is the only scheme that is free of charge for landlords or agents, as it works entirely from the interest gained on the monies.) Within 14 days of receiving a deposit, the agent or landlord must give details to the tenants how the deposits are protected. (i.e. The contact details of the tenancy deposit scheme selected; the landlord’s or agent’s contact details; how to apply for the release of the deposit; information explaining the purpose of the deposit; what to do if there is a dispute at the end of the tenancy)

At the end of the agreed term of the tenancy, the landlord and the tenant agrees on what is fair distribution of the deposit and both get their part. In case of a dispute the scheme holds the money until the parties come to an agreement in any ways.

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Your money protected!!!