Tenancy Deposit Management 

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On 6 April 2007 the Tenancy Deposit Law was introduced. It specifies that landlords and letting agents may not withhold a deposit if the tenant is entitled to all or part of it.

The new legislation applies to all Assured Shorthold Tenancies in England and Wales.

Existing landlords must take note of this change if appropriate action hasn't already been taken concerning tenancy deposit management.

What does the Tenancy Deposit Law mean for landlords?

The deposit for the property must be repaid to the tenant in full when they are entitled to it, unless they have incurred fines through any damage to the property or any items on the inventory.
 
Please note that landlords who fail to protect tenancy deposits will have to reimburse them three times the original deposit sum.

The main two schemes and its providers:

• Custodial schemes - under this scheme the tenant's money is deposited into the Deposit Protection Service (DPS) free of charge.

The DPS is the only custodial scheme available. Landlord registration and transactions can all be carried out online.

• Insurance-based schemes - there are number of services available that specialise in this kind of scheme.

The Tenancy Deposit Scheme (TDS) not only enables letting agents and landlords to hold deposits, but also runs a dispute resolution scheme run by The Dispute Service.

Required action from the landlord

Within 14 days of the deposit being paid, you will be expected to provide your tenant with deposit management details stating how the deposit is being protected. You are required to provide:

• contact details of the tenancy deposit scheme
• contact details of the landlord or agent
• how to apply for the release of the deposit
• information explaining the purpose of the deposit
• necessary action to take if there are disputes concerning the deposit

At the end of the tenancy

Within 10 days of the tenant moving out, the full tenancy deposit or the deposit minus the cost of any damages incurred must be returned.

Where there are unresolved disputes between the landlord and the tenant regarding the deposit, there is a service that helps resolve any problems. These services are available from the scheme holding the tenant's deposit.

Ultimately, the tenancy deposit management scheme provides protection for the tenant and saves you any potentially time consuming problems when they leave your property.

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