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Since April 2007 all damage deposits paid for an Assured Shorthold tenancy must be registered in one of the governments approved tenancy deposit schemes.

Deposit Schemes – explained

The government introduced a provision in the Housing Act 2004, whereby it will be a requirement that all landlords/agents that wish to take a monetary deposit will need to place the deposit into a Tenancy Deposit Scheme. The tenancy deposit scheme is described in sections 212 to 215 and schedule 10 within the Housing Act 2004.

It was introduced to safeguard tenants’ deposits which are paid in connection with Assured Shorthold Tenancies against unscrupulous landlords and agents who withhold the deposits with no justified reason, it helps to facilitate with resolving disputes over the return of the deposit. How does it work?

Two types of schemes

In this scheme the deposit is forwarded to a designated third party. It is then held by this party throughout the tenancy until the termination of the tenancy and is returned when all parties are happy with the appropriation of the deposit.

This is whereby the landlord or the agent holds onto the deposit but the landlord or agent is involved in a scheme that ensures that should the landlord withhold the deposit then the scheme shall pay out.

Please Note
If a deposit is not protected, the landlord will be breaking the law. The Landlord will be unable to regain possession of the property using notice-only grounds for possession under the Section 21 of the Housing Act 1988. The tenant can apply for a court order requiring the deposits to be protected, or for the prescribed information to be given to them. If the court finds that landlord hasn’t protected the deposit, it can order the person holding the deposit to either: repay it to the tenant or pay it into a custodial TDP scheme’s bank account within 14 days. The court may also order the landlord to pay up to 3 times the deposit within 14 days of making the order.

The Three Schemes:

The Deposit Protection Service (The DPS) launched in 2007 and has grown to become a trusted partner to many landlords and letting agents, now protecting over one million tenancy deposits *.

* as of December 2013

Please Read More on the Deposit Protection Scheme website here: http://www.depositprotection.com/**

**Authorised by Department for Communities and Local Government

mydeposits is a government-authorised tenancy deposit protection scheme. It is designed to enable landlords and letting agents in England and Wales to take and hold a deposit for the duration of the tenancy.

Please Read More on the mydeposits website here: http://www.mydeposits.co.uk/***

***Authorised by Department for Communities and Local Government

The Tenancy Deposit Scheme is a multi-award winning, government approved provider of tenancy deposit protection and alternative dispute resolution in England and Wales. TDS are an independent, not-for-profit company operated by The Dispute Service Ltd, the UK’s longest established provider of tenancy deposit protection.
Please Read More in the TDS website.


For more information you can visit this Government website.


Inventory, Check in and Check out

A detailed inventory helps landlords and agents to compare the state of the property on check-in and check-out and determine whether they need to make any deposit deductions. It will also be relied upon if both parties need to resolve their differences using the free dispute resolution service offered by their tenancy deposit scheme.

A new guide has been produced to help avoid disputes between landlords, letting agents and tenants over the return of deposits at the end of the tenancy.

Get Free Inventory Guide for landlords and agents.

Get Free Inventory Guide for landlords and agents.

The deposit must be registered within 30 days of receipt by Landlord or letting agency (i.e. Letting Homes) and the tenants informed. As we do not hold deposits we advise our Landlords to look into the schemes that are on offer. We provide help with the procedures and guide Landlords through the whole process, giving easy to understand step by step instructions.

*If you are a landlord that lives overseas you have to join the custodial deposit protection scheme.

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