Tenancy Deposit Protection Scheme

The Tenancy Deposit Protection Scheme was introduced on the 6 April 2007 and applies to all new Assured Shorthold Tenancies from that date.

From the 6 April 2009 only regulated letting agents and corporate and individual landlords will be covered by the insurance based Tenancy Deposit Scheme. Regulated agents are those that are members of ARLA, NALS, NAEA or RICS. Deposits held in the custodial Tenancy Deposit Scheme are unaffected.

This free scheme has been introduced by the government to make it easier for people to get their deposit back when their tenancy comes to an end.

Tenancies that commenced before 6 April 2007 will not be covered by the scheme until they take on a new tenancy.

The Council's Deposit Guarantee Scheme, where the Council covers a deposit by way of a bond will not be affected by the Tenancy Deposit Protection scheme because no money passes to the Landlord. Further information on the Deposit Guarantee Scheme is available from Housing Services.

How will the Tenancy Deposit Protection scheme work?

Tenants

When you are signing a new tenancy agreement with your landlord, ask how your deposit will be protected. Your landlord should provide you with details of the scheme protecting your deposit within 14 days of receipt of the deposit.

Landlords

Are able to choose between two types of scheme: a single custodial scheme and two insurance-based schemes.

Custodial Scheme

Once the tenant pays the deposit the landlord pays the deposit into the scheme;

At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme operator who will return the deposit in the way agreed by both parties.

Insurance-based schemes

Once the tenant pays the deposit the landlord retains it and pays a premium to the insurer so that the deposit is protected.

At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit;
If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved by the Alternative Dispute Resolution Service or the Courts.

Custodial and Insurance-based schemes

In each scheme, the deposit must be returned within ten days of the landlord and tenant agreeing how the deposit should be divided, or within ten days following notification of an Alternative Dispute Resolution Service (ADR) decision or a court decision.

For further information on the Tenancy Deposit Protection scheme visit www.communities.gov.uk or contact Housing Services.