New Tenancy Deposit Rules

Tenancy Deposits relating to all new Assured Shorthold Tenancies Created on or after 6 April 2007

The Government has introduced amendments to the Housing Bill which will mean that neither landlords nor agents will be able to hold on to the deposit during a tenancy unless they are part of an approved scheme.

The legislation will require tenancy deposits to be safeguarded explicitly by schemes which also provide for the resolution of any disputes over their return. The Government itself will be responsible for a scheme under which landlords and agents give up control of deposits to a third party. In addition it has looked to recognise public bodies to seek its approval to set up alternative schemes for their members and clients.

To protect your interests we have therefore joined the Tenancy Deposit Scheme for Regulated Agents (TDS). It is supported by the Association of Residential Letting Agents, The Royal Institution of Chartered Surveyors and by The National Association of Estate Agents.

The Scheme will allow us to continue to hold deposits on your property. If there are disputes over how they should be allocated which we cannot settle, they will be referred to the Independent Complaints Examiner. He will adjudicate within 10 working days of receiving all the necessary papers.

The fees to be a member of the approved scheme are considerable however due to the large amount of transactions we handle in each year we are able to spread the cost to each individual landlord to a modest £25 plus VAT for each new tenancy created on or after 6 April 2007. This will be deducted from your first months rent as a ‘Deposit Administration Fee’. It is worthy to note at this point that should you be entitled to join the scheme in your own right the individual fee can be as much as £90.00 per tenancy agreement so we trust you will appreciate just how small our charges are in real terms. Regretfully the Housing Bill does not allow us to recover the cost from the tenants.

In many ways Landlords who enjoy our fully managed service will see little change other than the small administration charge and the need to refer any dispute at the end of the tenancy to the Independent Complaints Examiner.

Landlords using our introduction service will not be able to keep the deposit as they have done in the past. They must either pass the deposit to the government scheme or allow us to retain the deposit to be administered under the TDS scheme.

We will be including the relevant clauses in our terms of business and tenancy agreements and we strongly recommend that you accept them, of course it will be open to you to object, but we must stress that this will mean handing your deposit over to a Government sponsored body now the new Housing Act has been implemented.

As you will appreciate Tenancy Deposit Protection has the potential to drastically change the dynamic between tenant and the landlord/agent. Not least, because right at the very start of the process the tenant must be informed of how they can complain if they are not happy with the way in which their deposit is handled at the end of the tenancy. Inventories and start of tenancy procedures will be key but so will a reasoned approach in respect of deductions for cleaning, dilapidations etc. We have much experience & tried and tested systems to deal with this proceedure.