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Important Changes To Deposit Protection Schemes


Tuesday, April 9, 2013
Important Changes To Deposit Protection Schemes

Important Changes To Deposit Protection Schemes

There are now four authorised deposit protection schemes in the UK: The addition of a fourth deposit protection company could create even more confusion in the UK courts as there are different rules and regulations that must be followed for each provider.

The Tenancy Deposit Scheme (TDS), Deposit Protection Scheme (DPS) and mydeposits have been joined by Capita Tenancy deposit protection scheme . This is an insurance based, rather than custodial scheme, meaning that the deposit is held by the agent or landlord.

It’s all change for the previously established UK deposit protection schemes too.

TDS are trying to make their scheme more user friendly and more flexible to allow them take a more pragmatic approach to landlord’s individual circumstances – not just following rules for rules’ sake.

  • The clauses which TDS previously required for inclusion in tenancy agreements and terms of business have now become ‘suggested clauses’. Previously TDS could only adjudicate in a dispute if landlords/agents included these in submitted documentation, but now TDS will consider each agreement on its own merits to decide if it is appropriate for use to handle the dispute.
  • The 10 day time limit for telling a tenant if deductions are going to be made has been removed. TDS ask that landlords/agents deal with end of tenancy matters as soon as is practicable and tell tenants promptly if deductions are being made. If it hasn’t been done within 10 days TDS will consider each case on its own merits to decide if the member has acted fairly rather than applying a fixed time limit.
  • Letting agents who use the ‘Let Only’ option and for users of the Tenancy Deposit Scheme for Landlords no longer need to manually renew tenancies at the end of the fixed term. We will assume it is continuing on a statutory periodic basis and renew it automatically. This does not incur any extra charges. But remember! If there are any changes to the agreement it will be considered a new tenancy and as before, must be re-protected.
  • As part of the new contract TDS are required by the government to use best endeavours to notify tenants when deposit protection ends. Please be sure to include as many contact details for your tenants as possible, including an email address.
  • For TDS to adjudicate in a dispute TDS must have consent from the tenant and if there are multiple tenants we need consent from at least one. If one of the tenants refuses consent for adjudication we cannot adjudicate.
  • A small number of tenancies had still been allowed 6 months to raise a dispute. All disputes must now be raised within 3 months of the end of the tenancy.

All of the rules, plus a summary of the changes are available on the TDS website or the TDS can be contacted on 0845 226 7837

DPS have also introduced an insurance based deposit protection scheme, that they insist is Fast, Fair and Secure.

  • Landlords and letting agents can access online accounts 24/7 and submit deposits in minutes, allowing you to concentrate on doing business, not paperwork.
  • DPS are not affiliated to any particular trade body and offer an independent and free Alternative Dispute Resolution (ADR) service which aims to resolve any disputes quickly and without the need for court action.
  • All deposit funds are held in accordance with Financial Services Authority client money regulations and managed by Computershare Investor Services Plc, a global business with more than ten years deposit protection experience.
  • Registration is simple and quick – DPS just need your contact details and your agreement to their general terms and conditions. You will then be sent an activation email, and can start to submit deposits to be protected by The DPS. Upon registration or submission of your first deposit through either of our schemes, you will need to accept the appropriate terms and conditions of that scheme.

INSURED

CUSTODIAL

No registration or annual renewal fees

The DPS Custodial Scheme is open to all letting agents, landlords and organisations

You retain the deposit and protection will be provided to your tenant for the duration of the tenancy

There are no membership fees or qualifying criteria to fulfil

Competitively priced

The DPS will safeguard the deposit throughout the period of the tenancy and repay the funds to the appropriate parties

Available to landlords and organisations on a ‘pay as you go’, per tenancy basis

All funds are ring fenced and held in accordance with client money regulations

Letting agents will be required to be associated with, members of or accredited by RICS, ARLA, NAEA, NALS, UKALA or The Law Society and will be required to agree to monthly invoicing paid by direct debit

All deposits are repaid within 2 calendar days on receipt of a jointly authenticated repayment instruction

Volume discounts may be available for letting agents – please contact DPS for further details

 

Mydeposits scheme in Northern Ireland was also launched on 1st April 2013.

The Tenancy Deposit Scheme (TDS) Regulations, which came into force in November 2012, require landlords and letting agents in Northern Ireland to protect their tenants’ deposits with a government-authorised scheme, such as mydeposits Northern Ireland.

In order to comply with the new legislation landlords and agents will have to protect their tenant’s deposits using either a custodial or insurance-based scheme. In other words, landlords and agents must decide whether they wish to hold onto their tenant’s deposit money themselves (by using an insurance-based scheme), or hand it over to the scheme to retain for the duration of the tenancy (by using a custodial scheme).

mydeposits will provide both options and landlords and agents are free to decide which option best suits their requirements.

With both options landlords, agents and their tenants will have access to a free and impartial dispute resolution mechanism (DRM) to resolve a dispute over the amount of deposit to be returned at the end of the tenancy, without involving the courts.

Landlords and letting agents who take a deposit from their tenant can access further information about the new legislation and their responsibilities by visiting the mydeposits Northern Ireland website www.mydepositsni.co.uk

If You would like further help or advice with deposit protection please contact Legal 4 Landlords on 0844 5674001


This was written by Mike Clarke. Posted on at 11:30 am. Filed under Landlord News. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.