Beresford Residential - Estate Agents Brixton Clapham - Lettings Agents Brixton Clapham Balham Streatham

 

           

Brixton Office: 020 7326 7450
Streatham Office: Opening 23rd August 2014

info@beresfordresidential.com
 

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Keeping Your Deposit Safe

From 6 April 2007, all deposits taken by landlords and letting agents for Assured Shorthold Tenancies in England and Wales must be protected by one of three tenancy deposit protection schemes.

The deposit schemes provide tenants with a degree of protection and enable them to get all or part of their deposit back when they are entitled to it.  The presence of the schemes also encourage landlords & tenants to make a clear agreement at the start of a tenancy on the condition of the property, usually by way of a formal inventory.  The schemes also provide a free dispute resolution service in the event that landlords & tenants cannot agree on how the deposit is to be repaid at the end of a tenancy

There are two types of tenancy deposit protection schemes available for landlords and letting agents, and the government has awarded contracts to three companies to run schemes:

Custodial Schemes

1) The tenant pays the deposit to the landlord.
2) The landlord or agent then pays the deposit to the scheme provider.
3) Within 14 days of receiving the deposit the landlord must provide the tenant with details of how their 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, and what to do if there is a dispute about the deposit.
4) At the end of the tenancy, if an agreement is reached about how the deposit should be divided, the scheme will return the deposit as agreed by both parties.
5) If there is a dispute, the scheme will hold the deposit until the dispute resolution service or courts decide what is fair.
6) The interest accrued on deposits held in the scheme will be used to pay for the running of the scheme and any surplus will be used to offer interest to the tenant, or landlord if the tenant isn’t entitled to it.
 
 
There is currently only one custodial scheme, and this is the scheme that Beresford Residential use to register tenancy deposits where we are asked to do so on behalf of a landlord.

 
The Deposit Protection Service (The DPS) is free to use and is open to all landlords & agents. The service is funded from the interest earned from deposits held in the scheme.  Their contact number is 0844 4727 000.

 

 
 
Insurance-Based Schemes

1) The tenant pays the deposit to the landlord.
2)
The landlord retains the deposit and pays an insurance premium to the scheme provider.
3)
Within 14 days of receiving the deposit the landlord must provide the tenant with details of how their 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, and what to do if there is a dispute about the deposit.
4)
At the end of a tenancy, if an agreement is reached about how the deposit should be allocated, the landlord (or agent) will return the agreed amount.
5)
If there is a dispute regarding how the deposit should be divided, the landlord must hand over the disputed amount to the scheme provider until the dispute is resolved.
6)
If for any reason the landlord fails to comply with the rules, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
 

 
There are two insurance-based schemes:

 

mydeposits is a partnership between the National Landlords Association and Hamilton Fraser Insurance.  Their contact number is 0844 980 0290.


The Tenancy Deposit Scheme (TDS) is run by The Dispute Service and builds on a scheme established in 2003 to provide dispute resolution and complaints handling for the lettings industry.  Their contact number is 0845 226 7837.

 




 

For more information on Tenancy Deposit Protection, visit the Directgov website or contact one of the team at Beresford Residential. 


Non Housing Act Tenancies

It is only Assured Shorthold Tenancies (AST's) that must be protected by law under one of the statutory Tenancy Deposit Protection schemes, which means that certain residential tenancies are not covered by the regulations.  For example, if the tenancy is a 'Company Let' (where the tenant is a company), or if your landlord is also resident at the property, there is no obligation to registered the tenancy deposit with a scheme.

In circumstances where there is no obligation to register the deposit with a deposit scheme, this will be noted in your tenancy agreement.  At the end of the tenancy if there are any disputes regarding the return of the deposit, or any proposed deductions, the tenant would have to apply to the small claims court as they are able to deal with disputes about deposits. The court procedure is straightforward and you do not need a solicitor to bring an action in the small claims court.

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