Tenancy Deposit Scheme

[damiencannell]

Hi All

There are a lot of posts on here regarding deposits and problems wth them by both. I thought I would make everyone aware of the new TDS (Tenancy Depost Scheme) This is off the back of secondary legislation from the 2004 Housing act and comes into force in April 2007

There are two types of protection:

1. Insurance based scheme - Basically most agents will use this and some landlords. They will keep deposit monies and pay money into scheme or percentage (TBC). When it comes time to return the deposit if both parties are happy then it gets refunded direct by LL. If there is a dispute then it goes to ADR (Alternative Dispute Resolution) and undisputed amout is released immediately. The ADR decision is final.

2. Custodial Scheme - This is the main Scheme and again deposit monies recieved must be paid in within 14 days of the agreement being signed. All monies are held by the scheme and released also. ADR happens if there is a dispute and its decision is again final NB - Important Two signatures are required before release of funds once two signatures are recieved monies must be payed back within 10 days.

Landlords will have to adhere to one of these on any new tenancy signed on or after aprill 2007. Failure to do so will mean on of the following:

• Landlord cannot use a section 21!!!!!! (yes that means cant get possesion)
• Landlord may be forced to pay up to 3 times the original amount to the tenant!!!!

Basically if you are a landlord (as of April 2007) you will have to do either one when recieving a deposit from a tenant(s) within 14 days of the signing of the agreement - this is important as they do not have to do anything until a tenancy agreement is signed.

Also important to note that Interest is payable on the deposit amount to the TENANT on the custodial scheme

Lastly the bidders have been finalised for both schemes as follows:

Insurance - National Landlords Association (NLA) & Dispute Servive Ltd

Custodial - Computer Share Investors Ltd (been running similar scheme in Australia for years)

TDS had been designed to protect both landlords and tenants and will finally bring some clarity to deposits and disputes regarding them.

Click the scales if this was useful

D

[demon_x_slash]

Hmm. Would it be possible to transfer a deposit that is already held by the landlord into this scheme when it starts, say at the renewal of the tenancy?

[damiencannell]

With the consent of the landlord and if a new tenancy agreement was signed I dont know of any reason why it couldnt be. Though im unsure of the actual legality if a landlord didnt want to but will endeavour to find out.

D