"The Landlords Friend"
|As of 6th April 2007 the way in which deposits are held for Assured Shorthold Tenancies changed.
By law a landlord will have to lodge the deposit with a scheme that has been approved by the Government. Failure to do so could lead to serious penalties as set out at the end of this briefing.
The three schemes are as follows:
*The Deposit Protection Service:
*Tenancy Deposit Solutions Ltd:
*The Tenancy Deposit Scheme:
The system will work as follows:
Within 14 days of taking the deposit, the landlord must provide the tenant with the following details regarding the deposit:
The contact details of the tenancy deposit scheme selected.
The landlord's contact details.
How to apply for the release of the deposit.
Information explaining the purpose of the deposit.
What to do if there is a dispute about the deposit.
At the end of the tenancy the landlord and tenant should agree as to whether any deductions are necessary and apply for the release of the deposit from the scheme. The tenant should have the agreed sum returned from the scheme within 10 days.
It is unfortunate on the tenants that the people who thought of the scheme did not take into account that many tenants use their deposit as a deposit on the next property - nor can the tenant have any say as to which scheme should be used - it is totally up to the landlord.
In the event of a dispute and no agreement being reached as to how the money should be divided up then the scheme holding the deposit will provide a free resolution service. The disputed amount will be held until resolution.
Failure to comply carries the following penalties:
Where the landlord does not inform the tenant of the whereabouts of the deposit, the tenant can apply to the local courts. The courts can then order the landlord to either repay the deposit or get it protected. If the courts wishes are not carried out within 14 days the landlord will be ordered to repay three times the amount of the deposit to the tenant within 10 days. Furthermore where the deposit has not been protected the landlord can not evict the tenant using a Section 21. Therefore, by not securing the deposit you will not be able to get your house back and face a large fine.
Not an Assured Shorthold Tenancy:
Guarantors:Some landlords plan to get around the Tenancy Deposit Scheme by simply not taking deposits. This is a practice that we ourselves often use for our student lets. The idea is simple, instead of taking a deposit you get a letter of guarantee from the parents, agree the inventory with them and at the end of the tenancy agree the check out with them. The guarantor has made a formal promise to reimburse you for any breakages, non payment of rent and bills and of any unnecessary wear and tear.
For a comprehensive list of inventory clerks, please click here.
To view an update on deposits please click here.
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