It is a requirement for every landlord to register a tenant’s deposit to a government approved tenancy protection scheme.
Upon the start of tenancy, a deposit will be made by the tenant which serves as non-payment for rent or security against damages. In 2007, all landlords were required to register the tenant’s deposit to a Deposit Protection Scheme, this program is purposed to protect the money to be returned safe to the tenant at the end of tenancy provided that all terms and conditions in the tenancy agreement is met. This protection program enables lettings industry to provide a standard and quality service to tenants and making sure they are treated fairly by their landlords.
The landlord can choose from the three government approved deposit protection scheme. These are:
- The Deposit Protection Service
- The Tenancy Deposit Scheme
These schemes offer two different ways on how you want the money to be secured. First is the custodial scheme and the second is the insurance scheme. The protection depends if you would like to hold the monetary deposit amount to yourself or if you want it secured independently.
A custodial scheme is a type wherein landlords give the total amount of deposited money to the scheme and will then be stored into the clients account until the timeframe of tenancy ends.
On the other hand, the Insurance Based Scheme offers in keeping the deposit with the landlord and the landlord alternatively pays for a fee that protects the money until the end of tenancy.
When deposit is made and protected some proofs needed to be sent to the tenants together with together with other important information like:
- The amount of the deposit
- Address of the property
- If the deposit belongs to a custodial or insured scheme
- The name and contact details of the tenancy deposit protection including its dispute resolution service.
- Landlord’s or agent’s correspondence details
- Possible reason to withhold the deposit
- How the tenant agrees about the terms in getting the deposit
- what the tenant should do if they can’t get hold of the landlord at the end of the tenancy
- what to do it there’s a dispute over the deposit
A templated document will be given to you once you use on of the Deposit Protection Scheme mentioned above.
The landlord is also required to comply the rules stated in the program to ensure that you are capable in claiming the deposit in the event of any damages made.
- The deposit must be protected within 30 days upon commencement of the tenancy
- An inventory must be provided regarding the condition of the property to be carried out in the outset of tenancy and must be signed by both parties.
- Making sure that the details of the deposit is securely registered with the name and contact details of the tenants including their start and end date.
- Provide proof of the deposit protection and details of the scheme to be given to the tenant.
If this details and requirements are failed to be carried out, then there might be a serious consequence entailed. In an event that serving information to the tenant within the given timescale is not done then Section 21 Notice will be given to the you stating to regain possession of the property and may obliged you to repay the deposit three time from its deposit value.