Tenancy Deposit Protection Housing Act 2004
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From 6th April 2007 all deposits take from landlords for assured short hold tenancies in England and Wales must be protected by a tenancy deposit protection scheme.
How does it work?
TENANTS
After 6th April 2007 when you sign a new tenancy agreement with your landlord, ask how your deposit will be protected. Your Landlord can provide you with the contact details of the scheme protecting your deposit.
LANDLORDS
You will be able to choose between two types of scheme: A single custodial scheme And two insurance based schemes
CUSTODIAL SCHEME
- The tenant pays the deposit to the landlord
- The landlord then pays the deposit into the scheme
- Within 14 days of receiving a deposit, the landlord must give the tenant prescribed information about the scheme being used and the tenancy. (the prescribed information will be set out in the secondary legislation)
- At the end of the tenancy if the landlord and tenant agree how the deposit should be divided they will tell the scheme which returns the deposit, divided in the way agreed by both parties.
- If there is a dispute, the scheme will hold the amount until the dispute resolution service or courts decide what is fair.
- The interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will used to offer interest to the tenant, or landlord if the tenant isn’t entitled to it.
INSURANCE BASED SCHEMES
- The tenant pays the deposit to the landlord
- The landlord retains the deposit and pays a premium to the insurer – the key difference to the custodial scheme
- Within 14 days of receiving a deposit, the landlord must give the tenant prescribed information about the scheme being used and the tenancy. (the prescribed information will be set out in the secondary legislation)
- At the end of the tenancy if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit
- If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved
- f for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
Full details of this policy can be found in the downloads section to the right of this page.
