The Tenancy Deposit Scheme
Every Landlord and Letting Agent that takes a deposit for a Assured Shorthold Tenancy must do so with one of the tenancy deposit schemes. The new regulations came into being on the 6th April 2007 under the United Kingdom Housing Act of 2004.
The three schemes are:
1. The Tenancy Deposit Scheme or ( TDS )
2. The Deposit Protection Service (The DPS)
3. My deposits (mydeposits.co.uk)
The first two are insurance based schemes while the third is a custodial backed scheme. What are the main differences?
With an insurance backed scheme, the landlord or agent pays a premium to the scheme but guards the deposit. With custodial schemes the deposit is transferred to the scheme within 30 days and held in escrow.
The Landlord or Agent should provide the tenant with the relative scheme`s details within 30 days of taking the deposit. If there is no dispute at the end of the tenancy then the deposit will be returned to all parties involved. If there is a dispute, the landlord or agent (or both) and tenant will be invited to use the alternative dispute resolution that is available free through the scheme. All parties involved in the alternative dispute resolution should know that they would be bound by the final decision of this process.
Tenant or Landlord may file a claim 14 days after the tenancy has ended. Documents requested from the ADR will include tenancy agreements, inventories, check in and check out reports and any other evidence that may be applicable to the situation.
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