Landlords: Deposit Protection
Deposit Scheme
As you may know, from 6th April 2007 all deposits taken by Landlords in relation to an Assured Shorthold Tenancy Agreement must be registered with an approved Tenancy Deposit Scheme.
There are two types of scheme that you may use to safeguard your tenants deposit: a custodial scheme and two insurance-based schemes.
A landlord will have 14 days to safeguard a deposit from the day he receives it. The landlord will have to provide the tenant prescribed information about the scheme safeguarding the deposit within these 14 days.
To avoid disputes having to go to the courts, both schemes will be supported by an Alternative Dispute Resolution (ADR) service - although the use of this will not be compulsory.
Custodial Scheme
If you choose to register your tenants deposit with a custodial scheme you would be responsible for submitting the deposit cheque to the scheme within 14 days of the tenancy commencement date. (Failure to do this may result in a fine equivalent to three times the deposit and will affect your right to serve notice.) When your tenant is due to vacate you will be responsible for recovering the deposit from the scheme and, once the landlord and tenant agree how the deposit should be returned, in full or in part, it must be paid back to your tenant within 10 days. If you choose a custodial scheme, we will require your intension to do so in writing before we can issue the deposit to you.
Insurance Based Scheme
Alternatively, you can instruct Absolute to register and hold your deposit on your behalf. Absolute Property are registered with Hamilton Frasier Insurance and we insure all our deposits through this scheme.
You will be charged a small registration fee for our time plus the insurance premium for the scheme. We will then agree deductions with you and your tenant and return the deposit accordingly and within ten days of the tenant requesting that the landlord return his deposit.
For more information about Deposit Schemes on the DirectGov website,
please click on the link below:
