The Tenancy Deposit Scheme
All tenancy deposits must be protected in a government authorised ‘tenancy deposit scheme’ This law applies to all tenancies that are Assured Shorthold Tenancies but does not apply to non housing act tenancies (company lets or contracts with rent above £100,000 per annum).
The scheme was designed to ensure that tenant deposits are protected so that;
• Tenants get all or part of their deposit back, when they are entitled to it
• Any disputes between tenants and landlords or agents will be easier to resolve
• Tenants are encouraged to look after the property they are renting
At the commencement of a new tenancy, the tenant pays the deposit to the landlord or agent as usual, who must then ensure its protection. There are three schemes to choose from.
Firstly, a custodial scheme where the money is held by the scheme until the end of the tenancy. The custodial scheme is free to use, the landlord or agent simply puts the deposit into the scheme at the beginning of the tenancy.
The second and third available schemes are insurance based schemes under which, the landlord or agent keeps the deposit and pays a fee to the scheme to insure against any failure on their part to repay money due to the tenant.
Within fourteen days of receipt of the deposit, the landlord or agent must provide the tenant with details of how the deposit is being protected including:
• the contact details of the tenancy deposit scheme selected
• the landlord or agent’s contact details
• how to apply for the release of the deposit
• information explaining the purpose of the deposit
Jacksons have been a member of Tenancy Deposit Solutions Ltd (one of the two insurance based schemes) since April 2007 and the service provided by this company has, to date, been both very professional and beneficial to our clients.
It is worth noting that under our ‘Let and Rent Collection’ or ‘Full Management’ services, any costs or paperwork involved with insuring the deposit in one of the schemes is administered by Jacksons Estate Agents; thus relieving the landlord of the responsibility. Once completed, your deposit will be held by Jacksons Estate Agents and insured under Tenancy Deposit Solutions Ltd. More information regarding the holding of deposits can be found at http://www.mydeposits.co.uk/