Tenants protection
Landlords must comply with new laws

New laws for the first time give tenants protection over how their deposits are held and, significantly, a new faster, cheaper way of resolving disputes.

From April 6, landlords can no longer place tenants’ deposits where they like, and withhold the bond as they see fit, but must use a government- authorised scheme to protect the deposit.

Tenants also now have the opportunity from April 6 to use a free alternative dispute resolution (ADR) service run by the deposit schemes if they disagree with their landlord over how much bond is to be withheld.

Under the new rules, all landlords taking new deposits for assured short-term tenancies in England and Wales from April 6 now have to protect the deposit by using one of three schemes, described as custodial or insurance-backed.
With the custodial scheme, the landlord or letting agent places the tenant’s deposit with a private firm, The Deposit Protection Service to safeguard the deposit until the tenancy ends.

Under the two insurance- backed schemes – Tenancy Deposit and The Tenancy Deposit Scheme, the landlord retains the bond money, but must pay a premium to the scheme of choice to insure against loss.
When the lease expires, tenants should get their money back within 10 days if there is no disagreement about how much is to be returned. Importantly, if there is a dispute, the scheme, not the landlord, will hold on to the disputed portion of the deposit until agreement is reached.

This article is for your general information and use only and is not intended to address your particular requirements. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without appropriate professional advice after a thorough examination of their particular situation. Your home may be repossessed if you do not keep up repayments on your mortgage.

Article date: 03.07