Tenant Deposit Scheme

Historically at the end of a tenancy an agent (or landlord) would release the deposit being held on the landlord’s behalf in accordance with an agreement met by the landlord and tenant. Unfortunately there were occasions when it was not that straightforward and there would often be hardship and inconvenience to both landlord and tenant resulting from disputes. On 6th April 2007 a new piece of Housing Act legislation came into effect. It dictated that all deposits taken for Assured Shorthold Tenancies (AST) after that date must be protected by a tenancy deposit scheme.

What are the legislative requirements?

• The tenant must be told which scheme their deposit is registered with
• Landlords in breach of these provisions will not be able to issue S 21 notices, and may have to pay the tenant compensation totalling three times the deposit
• The landlord/agent must submit the deposit to the operators of their scheme when requested to do so
• Each scheme must have procedures for resolving disputes without going to court
• There are strict time limits for the return of the deposit if there is no dispute
• The Act allows for both custodial and insured schemes

Who holds the deposit?

There are two ‘types’ of scheme available which affects this. Custodial schemes are where the deposit is lodged with an independent third party i.e. outside the control of the landlord or agent. Insured schemes allow the landlord/agent to retain control of the deposit as long as they are subject to suitable insurance arrangements. The Dispute Service was awarded a contract by the Government to run one such scheme: The Tenancy Deposit Scheme (TDS). Morgan Randall is a member and all appropriate deposits are protected by TDS. More information is available at www.thedisputeservice.gov.uk

How are the deposits held and protected?

We will hold your deposit, in our nominated client account. If a dispute arises at the end of the tenancy, reasonable steps must have been made to find a resolution within a couple of weeks. After that, any of the parties – landlord, agent or tenant – can approach an Independent Case Examiner (ICE). He will appoint an adjudicator to assist him in considering the evidence they provide, and aim to issue his decision within fifteen working days of receiving all the necessary papers.

If there is a dispute, what happens to the deposit?

We will transfer the disputed amount to the scheme which has a special cash fund which enables the ICE to carry on with an adjudication and to pay out the deposit. The Dispute Service will pay out the deposit according to the instructions of the ICE following his decision.

How are disputes resolved?

• Tenants have 20 working days to raise a dispute, which should be resolved within 10working days
• If not, you decide if you want to go to court, or to have the ICE deal with it –which is what The majority of people prefer
• The relevant information and supporting documentation is compiled and sent with a claim form to the ICE for adjudication
• The ICE will copy the details of the dispute to other party, asking them to tell him within 5working days if they intend to challenge it. They have a further 5 working days to send in their side of the story i.e.10 days altogether
• The ICE will appoint an adjudicator to assist him, with a view to issuing an adjudication within 15working days of receiving all the necessary paperwork
• The disputed amount will be paid out in accordance with the adjudication within a further 10working days

Who organises this when I let my property out through Morgan Randall?

In short, we do. We will automatically qualify whether the deposit needs to be protected and ensure the Tenancy Agreement reflects this. Where applicable we will register the deposit with TDS. As part of our service we will also cover the cost of this. Rest assured we will ensure you have complied with your obligations. Our system allows us to automatically register your deposit with TDS at the click of a button ensuring all information is securely and swiftly uploaded to TDS.

How does my tenant know their deposit is protected?

We will send your tenant a copy of the registration certificate. This will give piece of mind and also allow them to check online that their deposit is protected. They can also check with us any time they like on 020 7510 0915

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