Deposits from Tenants

Do you let out property as a buy-to-let or are you a tenant? If so, the new rules in force on 6th April may affect you. From that date all deposits taken by landlords for assured shorthold tenancies have to be protected by a new tenancy deposit protection scheme. There are two alternatives - the ‘custodial’ or ‘insured’ scheme.

Christina Smith says – “Under the custodial scheme the tenant pays the deposit to the landlord who then has 14 days to send it to the scheme and give the tenant certain information. At the end of the tenancy the scheme returns the deposit. If there is a dispute over damage, amounts etc. then the scheme will hold the amount until the dispute resolution service or Courts decide what is fair. Under the alternative insurances schemes the tenant pays the deposit to the landlord who retains this amount. However, the landlord must pay a premium to the insurer. Again certain information required by law must be given to the tenant. If there is a dispute then the landlord at that point only hands the deposit to the scheme to deal with and resolve the dispute. If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.

If you need any advice on this or any other property matter call Christina On 029 9221 0170.