Tenancy Deposit Scheme
From 6th April 2007, the Tenancy Deposit Scheme (TDS) outlined in the 2004 Housing Act will become effective. It is essential as a landlord that you are aware of this new legislation and what is required of you.
Whilst the majority of landlords deal fairly and honestly in returning deposits to tenants, the TDS was drafted to ensure that the minority of bad landlords behave responsibly by protecting tenancy deposits.
The TDS applies to Assured Shorthold Tenancies, the most common form of contract in England and Wales. Furthermore, the scheme only applies to tenancy agreements signed on or after 6th April 2007. Any tenancies signed prior to this date are exempt from the TDS.
Landlords are required to safeguard their tenant’s deposits by placing it in one of two types of scheme, outlined below:
Custodial scheme
- The tenant pays the deposit to the landlord;
- The landlord then pays the deposit into the scheme;
- The landlord must then provide the tenants the prescribed information regarding which scheme is being used, within 14 days of receiving the deposit;
- If the landlord and tenant agree at the end of the tenancy on how much of the deposit is to be deducted, they will then contact their scheme to return the deposit.
- If there is a dispute, the scheme will retain the amount until the dispute resolution service or courts decide what is fair
- The custodial scheme is free to use and open to all landlords
- For more information, click here
Contact: The Deposit Protection Service (The DPS)- please visit www.depositprotection.com or call 0870 7071 707
Insurance-based scheme
The processes are the same as those of the custodial scheme. However, there are two major differences: the landlord retains the deposit and pays a premium to the insurer.
If there are any disputes at the end of the tenancy, the landlord must put the disputed amount into the custody of the scheme until the issue is resolved. For more information, click here
Where to Go
There are two different companies you can use for this insurance based scheme:
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Tenancy Deposit Solutions Ltd (TDSL): this is a partnership between the National Landlords Association and Hamilton Fraser Insurance. TDSL deal primarily with private landlords, but letting agents can also join the scheme. They have yet to release their fees, although there will be preferential rates for National Landlord Association (NLA) members.
Contact: Tenancy Deposit Solutions Ltd (TDSL)- please visit www.mydeposits.co.uk
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The Tenancy Deposit Scheme (TDS): was established in 2003 to aid the lettings industry. This new scheme allows letting agents and landlords to hold deposits. Fees for letting agents vary from £521 to £1609. Fees for landlords have yet to be announced.
Contact: The Tenancy Deposit Scheme (TDS)- please visit www.tds.gb.com or call 0845 226 7837
The Alternative Dispute Resolution (ADR) service
This service would be used when a dispute occurs between the tenants and the landlord in regard to returning deposits. Both parties must agree to use this service, and in using this service will accept the decision of the ADR, with no recourse to the courts.
If the landlord and tenants do not agree to use the ADR service, disputes will then go to court.
Manchester Student Homes strongly advise that you are thoroughly aware of this new legislation. Further information can be found on our web-site, which will be available to view in the landlord section.