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Deposit Protection Legislation

The Deposit Protection Legislation is effective from 6 April 2007. There continue to be a large number of Landlords and Letting Agents who know little of the new legislation. It is the personal responsibility of the Landlords and Letting Agents to comply...

Here is a summary to date...

Landlords are required under this new legislation to tell their tenants how the deposit is protected within 30 days from the start of the tenancy, failure to do this could result in a court ordering a landlord to pay the deposit into the custodial scheme AND to hand over to the tenant three times the amount of the deposit by way of a compensation payment. The landlord will also be unable to regain possession of the property using notice-only grounds for possession under Section 21 of the Housing Act 1988.

For more information see the Landlords website or email:

The Government awarded contracts to the following three companies to run its tenancy deposit schemes on 22 November 2006.

The three schemes are:

The Deposit Protection Services (DPS)

This is the only custodial protection scheme, it is FREE to use and open to all Landlords & Letting Agents. Deposits must be actually handed over to this company to hold for the duration of the tenancy. The service is funded entirely from the interest earned from deposits held. Landlords & Letting Agents will be able to register and make transactions online. Paper forms will also be available. A dedicated call centre and an independent dispute resolution service will support the scheme. For more information visit the Deposit Protection website or call 0870 707 1707.

Tenancy Deposit Solutions Ltd (TDSL)

This is a partnership between the National Landlords Association & Hamilton Fraser Insurance. This insurance-based tenancy deposit protection scheme enables Landlords, either directly or through agents to hold deposits themselves. If there is a dispute at the end of the tenancy, only the disputed amount is paid to the company who will act as an arbitrator to resolve the dispute. Letting Agents can also join the scheme. For more information visit the my deposits website.

The Tenancy Deposit Scheme (TDS)

This is an insurance backed deposit protection and dispute resolution scheme run by The Dispute Service that builds on a scheme established in 2003 to provide dispute resolution and complaints handling for the lettings industry. The new scheme enables letting agents and landlords to hold deposits and works in a similar way to the scheme above. For more information visit the Tenancy Deposit Scheme website or call 0845 226 7837

Costs for the second & third schemes are available from each of their web sites.

There is a fourth option available to eligible tenants using Rent Deposit Schemes

Deposit Guarantee Schemes are locally administered schemes that offer a written guarantee in place of a cash deposit. These schemes operate separately to the National Tenancy Deposit Scheme, which allows claims to be dealt with in a speedy and transparent manner, for more information please contact the Housing Options team.

For Landlords with properties in the Swale Borough Council area there is an option to let your properties using the Rent Deposit Scheme run by Swale Borough Council. Landlords & Letting Agents using any of the first three schemes are legally required to tell their tenants which scheme they are using within 30 days of the start of the tenancy. Failure to do this could result in a court ordering a landlord to make a payment of three times the value of the deposit to the tenant as compensation and could ultimately affect any possession proceedings. More information and leaflets for both Landlord and Tenant are available from the GOV.UK website.

Landlords and Letting Agents should also be aware that if they renew a tenancy at any time after 6 April 2007 then the deposit is not exempt and needs to be lodged with one of the first three aforementioned schemes.

(Correct as at 11/05/09)

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