What has changed about taking a deposit from a tenant?

On the 6th April 2007 a tenancy deposit law was introduced in England and Wales, which made it compulsory for all landlords and letting agents to place new deposits for assured shorthold tenancies up to £25.000, in a Government-authorised tenancy deposit scheme.

There two types of scheme. The first is called the Custodial Scheme, where the tenant pays the deposit to the landlord or agent, who then pays the whole deposit into the scheme. The second type of scheme is called the Insurance Scheme, where the tenant pays the deposit to the landlord or agent, who retains the whole deposit and pays a premium to the insurer.

What must a landlord or agent do after taking a deposit?

Within 14 days, the landlord or agent or agent is required to register the deposit with one of the two Government-authorised tenancy deposit schemes and give the tenant prescribed information.

• how your deposit is protected including
• the contact details of the tenancy deposit scheme
• the contact details of the landlord or agent
• 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

What happens if the landlord or agent fails to comply with the legislation?

The tenant can apply to your local county court. The court can order the landlord or agent to either repay the deposit to the tenant ort protect it in a scheme, and to repay three times the amount of the deposit. In addition, if the landlord or agent has not registered the deposit and provided the required information within 14 days, then the normal Section 21 procedure for evicting the tenant will not apply.

What happens if I find a way round the legislation?

Some landlords have taken two months' rent in advance instead of a deposit and retained the second months' rent for the last month of the tenancy. A recent court case where a landlord did just this has found in favour of the tenant. Similar practices are being challenged by solicitors acting on behalf of tenants.

H.A.S Property Management is Authorised to register and hold tenants deposit in a special designated client bank account on behalf of landlords.

How the scheme works:

• H.A.S Property Management will register the deposit on your behalf, thus ensuring you comply with the legislation but without the hassle and expense of your joining the scheme as an individual landlord.
• Once registered, the deposit will be protected throughout the term of the tenancy.
• At the end of the tenancy, where there is no claim for damage or rent arrears, deposits are returned promptly.
• Where there is a claim for damage or rend arrears, H.A.S will attempt to mediate between tenant and landlord on the amount of the deposit to be withheld. Once agreement has been reached, the deposit will be allocated according to the wished of both landlord and tenant. There is a two week timescale to reach an agreement.
• In the unlikely circumstances where agreement cannot be reached between landlord and tenant within two weeks, H.A.S will refer the dispute to the Independent Complaints Examiner nominated as part the Scheme. The disputed amount of the deposit will be handed over to the Scheme until dispute is settled.

I would like H.A.S Property Management to register and hold the tenants deposit on my behalf:

What is the Tenancy Deposit Scheme?

The Tenancy Deposit Scheme has been developed to ensure that the deposits are protected and that disputes about their return are resolved swiftly, inexpensively and impartially.

Under the Tenancy Deposit Scheme

Deposits will be protected during the Tenancy.

Where there is no dispute at the end of the Tenancy, Deposits are returned promptly.

Where there is a dispute about the return of the deposit it will be dealt with fairly by the Independent Complaints Examiner.

The Independent Complaints Examiner will make his decision quickly, and the deposit will be paid out without unnecessary delay.

How are the deposits held and Protected ?

H.A.S, as approved members of the Tenancy Deposit Scheme hold the deposit, in a special designated client account. In most cases the tenant and the landlord will decide between them, assisted by the agent, how the deposit should be allocated. If there is a dispute, the landlord or agent has a couple of weeks to resolve it. After that, any of the parties - landlord , agent or tenant - can approach the ICE.