A Guide To Tenancy Deposit Scheme
On 6 April 2007, under legislation contained in The Housing Act 2004, the Government have implemented the Tenancy Deposit Scheme for assured shorthold tenancies in England and Wales. The aim is to give greater protection to tenants in private residential property who pay deposits to their landlords.
Landlords must register any deposit/bond taken from tenants and have three options available to them.
Deposit Protection Scheme - This is free to use and is funded from interest on deposits received by them; the deposit is paid into the scheme and is held on behalf of the landlord.
Tenancy Deposit Solutions - This is a joint scheme set up by the National Landlord’s Association and Hamilton Fraser Insurance; there is a joining fee payable and a fee for each deposit but the landlord can retain the deposit.
Tenancy Deposit Scheme - This is an insurance based deposit protection and dispute resolution scheme, which allows the landlord or their agents to hold the deposits.
Tenancy Deposit Scheme Legal Advice
Whichever scheme is chosen, within fourteen days of receiving the deposit, the landlord must comply with the conditions under the Act and either pay over the deposit to the deposit protection scheme or retain the deposit by paying the necessary fee to the tenancy deposit solutions scheme or tenancy deposit scheme.
Notification needs to be sent to the tenant advising which option the landlord has opted for and must be in the prescribed form.
At the end of the tenancy, if a custodial scheme has been chosen, the deposit is to be returned to the tenant within 10 days of notification being given to the administrator.
If the landlord has retained funds, again monies should be returned within 10 days. However, if agreement is not reached on the amount to be refunded, then the administrator of the scheme will direct the landlord to pay the deposit into a designated account within 10 days.
Alternative Dispute Resolution will be offered to the parties to try to resolve any dispute.
If landlords fail to comply with the new legislation then there are two possible sanctions which can be implemented against them:
- An application can be made to the court which could result in the landlord being ordered to repay the deposit plus a further three times the amount of the initial deposit back to the tenant.
- A possible bar on recovering possession of the property at the end of the tenancy.
Tenancy Deposit Scheme Solicitors
For further information please contact Linda Loton on 0370 1500 100 or firstname.lastname@example.org.
Wills and Trusts services for tenants and property owners
What ever the size of your property portfolio, as a landlord, it is highly recommended that you review your estate planning.
Did you know:
- Without a will in place, there is the risk that the Treasury will be the main benefactor of your estate.
- In the event that you became mentally incapacitated due to an accident or illness, without a will no one, be it your spouse, partner, parent or child has the automatic right to control your assets and therefore prevent anyone from being able to manage your properties.
Irwin Mitchell has a team of experts who can provide you with the inheritance tax planning, wills and trusts services to help protect you and your estate.
For further information please contact Carol Wells on 0370 1500 100 or email@example.com.