Indispensable GuideTo Tenancy Deposit

Schemes

GREYFOX.CO.UK

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

Landlords must be aware of the importance of tenant deposits, what they can

charge, and how the deposit must be managed. At Greyfox, we are pleased to

say we have assisted many local landlords manage their tenancy deposit,

and we are always happy to discuss this matter if required.

Landlords are required to place the tenant’s deposit into a Government

backed tenancy deposit scheme (TDP) if the tenant rents a property on an

assured shorthold tenancy. This has been the case for tenancies which

began after 6 April 2007.

In England and Wales, the deposit can be registered with:

• Deposit Protection Scheme

• MyDeposits

• Tenancy Deposit Scheme

At the end of the tenancy, the tenant must receive the deposit back (or the

agreed amount) within ten days of the landlord and tenant agreeing how

much should be returned.

If a tenant doesn’t rent property on an assured shorthold tenancy, the

landlord is allowed to accept valuable items for the deposit as opposed to

money. These items can include a watch or a car. However, these items are

not protected by a scheme.

INDISPENSABLE GUIDE TO TENANCYDEPOSIT SCHEMES

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

These schemes will ensure the tenant receives their deposit back if they

follow the terms of the tenancy agreement, cause no damage to the property

and pay bills and rent on time.

The landlord is duty bound to place the deposit into the scheme within 30

days of the tenant giving them the deposit. The landlord should also provide

the tenant with details of the scheme they have selected.

WHAT PROTECTION DOES THE SCHEMEOFFER?

Once the landlord has received the deposit, they have a list of things they

must tell the tenant within 30 days. This information includes the rental

property address, the amount of deposit, how the deposit is being protected,

the name and contact details of the TDP scheme, and the name and contact

details of the dispute resolution scheme it uses.

The landlord should also provide their name (or the name of any letting agent

they use) and contact details. Also, the landlord should list why they would

retain some or all the deposit, and also inform the tenant how to apply to get

the deposit back. The tenant should also be informed of what to do if there is

a dispute over the deposit, and what they should do if the landlord cannot be

contacted at the end of the tenancy.

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

WHAT INFORMATION MUST THE LANDLORD PROVIDE THETENANT REGARDING THE DEPOSIT SCHEME?

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

Once the landlord and tenant has agreed how much of the rental

deposit will be paid back, the landlord has 10 days to do so. If there is

a dispute regarding the amount of money which will be paid back, the

deposit will remain protected in the TDP scheme until the issue has

been resolved.

WHAT HAPPENS AT THE END OF THETENANCY?

HOW CAN A TENANT CLAIM THEIR DEPOSIT BACK?

If the tenant believes the landlord hasn’t used a TDP scheme, the tenant can

apply to their local county court. If the court believes the landlord has failed

to protect the deposit, it can order the deposit to be repaid to the tenant, or to

be placed into a TDP scheme’s bank account.

The court also has the ability to order the landlord to pay the tenant up to

three times the deposit, and this should be concluded within 14 days of the

order.

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

Yes. While the tenant deposit scheme offers a range of benefits to the tenant,

there are also potential benefits for the landlord. A considerable advantage is

the Alternative Dispute Resolution Service (ADR), which provides free and

independent adjudication at the end of the tenancy. If landlords and tenants

disagree, this service is often invaluable in resolving the problem.

Are You Choosing Between A Custodial Scheme Or An Insurance-BasedScheme?

If you are looking to choose between a custodial scheme and an insurance

scheme, the following steps associated with both are worth considering.

ARE THERE BENEFITS TO LANDLORDS WITH THE DEPOSIT SCHEME?

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

With the custodial scheme, the following steps are taken:

• The landlord receives the deposit from the tenant

• The landlord pays the deposit into the scheme within 30

days of receiving the deposit

• The landlord provides the tenant with information about

the scheme used, and how tenants can raise an issue

• At the end of the tenancy, if there is an agreement between

the landlord and tenant on how the deposit should be

divided, the scheme is informed and returns the deposit

based on the agreement from both parties

• If there is a dispute, the scheme holds the deposit amount

until the dispute resolution service or courts decide on how

the deposit should be split

• There is no fee to pay with this system

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

With the insurance-based scheme, the following steps are taken:

• The landlord receives the deposit from the tenant

• The landlord holds the deposit, registers it with the scheme within

30 days and pays a fee to the administrator of the scheme – this fee

is the crucial difference between the schemes

• The landlord provides the tenant with information about the

scheme used, and how tenants can raise an issue

• At the end of the tenancy, if there is an agreement between the

landlord and tenant on how the deposit should be divided, the

landlord returns the agreed amount

• If there is a dispute, the landlord must pass the deposit to the

scheme, who will retain it until the dispute is resolved

• If the landlord fails to comply, the insurance arrangement ensures

the deposit is returned to the tenant if they are entitled to it

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

With the insurance-based scheme, there is an additional fee, and the

landlord has more responsibility in retaining the deposit. However,

both options are valid, and it is often a matter of personal preference

as to which one is best for your needs. If you would like to discuss

these options, we are more than happy to assist you.

I n d i s p e n s a b l e G u i d e T o T e n a n c y D e p o s i t S c h em e s

At Greyfox, we ensure private landlords

receive all the support they need in this

challenging yet rewarding industry, and we

look forward to assisting you.

You can find us at Unit 2, Thetford House,

Walderslade Road, Walderslade, Chatham,

Kent ME5 9LR. You can call our lettings

department on 01634 865595, or you can

email us at lettingsteam@greyfox.co.uk.

CONTACT US

Unit 2, Thetford House,Walderslade Road,

Walderslade,Chatham, Kent ME5 9LR

01634 865595

lettingsteam@greyfox.co.uk

GREYFOX.CO.UK