Since 6 April 2007, all deposits taken by landlords for assured shorthold tenancies in England and Wales (the majority of tenancies), must be protected by a tenancy deposit protection scheme.
Landlords will have to participate in either a ‘custodial’ or ‘insured’ scheme and provide tenants with the contact details.
In the custodial scheme the tenant pays the deposit to the landlord who within 14 days must pass this on to the scheme. Also within 14 days the landlord must give the tenant the prescribed information (to be set out in secondary legislation) about the scheme being used.
At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme what they have agreed and the money will be paid out accordingly.
Should there be a dispute over the deposit, the scheme will hold the amount until the dispute resolution service or courts decide what is fair.
Interest accruing on deposits in the scheme will be used to pay for its running and any surplus will used to offer interest to the tenant, or to the landlord if the tenant is not entitled to repayment of the deposit.
In the insurances schemes the tenant pays the deposit to the landlord who retains this amount. However, the landlord must pay a premium to the insurer.
Click on the Link For Further Information on the Tenancy Deposit Scheme
Sunday, 17 October 2010
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