If you are a landlord letting a property out to tenants, it is vital that you are aware of the requirement that all deposits taken by landlords and letting agents for Assured Shorthold Tenancies in England and Wales must be protected by a tenancy deposit protection scheme.
There are two types of tenancy deposit scheme available for landlords and letting agents. These are insurance based schemes and custodial schemes. Both schemes offer a free dispute resolution service.
The landlord must be a member of one of the schemes currently in existence. Within 14 days of receiving the deposit, the landlord must provide the tenant with details of how the deposit is being protected including;
- The contact details of the tenancy deposit scheme
- The landlord’s or agent’s contact details
- How to apply for the release of the deposit
- Information explaining the purpose of the deposit and
- What to do if there is a dispute about the deposit.
If the landlord or letting agent does not protect a tenant’s deposit, then they will have to pay the tenant 3 times the deposit sum as compensation.
The requirement to belong to a tenancy deposit scheme operates to the benefit of both landlords and tenants. From the landlord’s perspective, where damage is created at the property, the scheme allows the appropriate amount to be deducted from the tenant’s deposit as compensation. It is important, however, to ensure that an inventory is completed prior to the tenancy commencing and when the tenancy has concluded. If this is not done, there is no proof of the damage claimed and the adjudicator is likely to find in favour of the tenant.
From the tenant’s perspective, the scheme protects them against the actions of unscrupulous landlords by ensuring that part or all of their deposit is returned to them at the end of the tenancy, however this does depend on the circumstances.
If you require any legal advice relating to the above or any aspect of landlord and tenant, then please contact us today on 01536 276300 or email firstname.lastname@example.org.
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