Deposit Protection Scheme

From 6 April 2007, all deposits taken by letting agents and landlords for assured shorthold tenancies in England and Wales must be protected by a tenancy deposit protection scheme.

There will be 2 types of scheme -- the ‘custodial scheme’ and the ‘insured schemes’. Coxford-lettings has opted for a 'custodial scheme', provided by The Deposit Protection Service.

With the custodial scheme the tenant will pay the deposit to the agent or landlord, who within 14 days must pass the deposit on to The Deposit Protection Service (see below). Also within 14 days the letting agent or landlord must give the tenant certain prescribed information about the scheme being used, including:

• The contact details of the tenancy deposit scheme selected
• The letting agent's or landlord's contact details (whoever takes the deposit)
• How to apply for release of the deposit
• Information explaining the purpose of the deposit
• What to do in the event of a dispute

At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme what they have agreed and the money will be paid out accordingly. If there should be a dispute, the scheme will hold the amount until the dispute resolution service or the courts decide what is fair.

The Deposit Protection Service (The DPS) is a tenancy deposit protection scheme accredited by the Government. It is provided free of charge, and funded entirely by the interest earned from deposits held in the scheme.

An independent Alternative Dispute Resolution (ADR) service, run by the Chartered Institute of Arbitrators, will help to resolve any disputes quickly and hopefully without the need for court action.