The Tenancy Deposit Scheme  is  part  of the new legislation brought in by the Housing Act 2004 and came into effect on 06 April 2007.

From 06 April 2007 all deposits received by letting agents and landlords from tenants for Assured Shorthold Tenancies (AST’s)  in England and Wales must be protected by a Government-authorised Tenancy Deposit Protection Scheme.

The  legislation  has come about to help protect deposits paid by tenants and make sure that  they  are  dealt  with  fairly  and  receive  all  or  part  of  the   deposit   back   where
appropriate.

Existing tenancies (AST’s) will not be affected, nor will tenancies that run onto a periodic tenancy after this date. However, tenancies that are renewed (i.e. a new AST is created) will  be  affected. The  only  way  to  avoid  this  new  legislation  would be not receive a deposit, but we do not recommend this. 

There  are  penalties  for not complying with the scheme and landlords / letting agencies must  carry  the  costs  and  carry  out  the  appropriate  administration at the start of the tenancy. All tenants must be notified as to where their deposit is held.

There  are  3  authorised  schemes available for holding deposits which were finalised in early  2007.  Landlords  and  agents can choose from one custodial scheme run by the Deposit Protection Service and two insured schemes. At first avenue we will be joining the custodial scheme run by the Deposit Protection Service.

The Deposit Protection Service – Custodial Scheme

This  is  the  only  custodial  scheme  available  and  is  run  by  Computershare Investor Services Plc  who  have  been awarded a contract by the government and will be funded
by the interest earned on the deposits held.

The  tenant  will  pay the deposit to the landlord/letting agent, who will then pay it into the scheme  within  14  days.  At  the end of the tenancy, if the landlord and the tenant agree how  the  deposit  should  be  repaid, they will tell the scheme administrator, who will pay out  the  money  as  agreed, plus any interest earned on their share. This refund process takes  up  to  10 working days and requires repayment ID codes issued to both parties at the  start  of  the  tenancy by the scheme. An independent Alternative Dispute Resolution (ADR) will resolve any disputes relating in returning deposits. 

Landlords  and  letting  agents will be able to deal with their deposits online unless paper based transactions are required.

For further information please visit www.depositprotection.com or call 0870 707 1707.

 
How Does This Affect You?

If you are a landlord and receive a security deposit for a new AST tenancy from 06 April 2007,  it  will  be  your responsibility  to  ensure  that  it  is  dealt with in line with the new legislation.

Here  at  First Avenue  we  will  deal  with  the  administration  of all deposits at no extra cost   to  our  landlords  as  part  of  our  comprehensive  landlord  services.   We  would  also recommend that most landlords at least take advantage of the FREE advise that we offer prior to letting out a property.

It  is  also  vital  with  the  new  tenancy  deposit  legislation  that the relevant actions are carried  out  such  as  carrying  out  a professional  inventory and check-in. without these checks  being  in  place,  it  can  be  very  hard  for  a  landlord  to  prove the to his or her property  at  the  end  of  a  tenancy,  as  there  is  no proof of condition at the start of the tenancy.  First  Avenue  will  automatically  include  a  professional  inventory,  check-in and check-out as part of our service.

If  you  would  like  to  discuss any aspect of the scheme further or seek advise on letting

out your property, please feel free to call us for an informal discussion on 020 8261 4411