Tenancy Deposit Protection Schemes

From Friday 6 April 2007, landlords must protect all deposits for assured shorthold tenancies using one of three schemes authorised by central government.

Under the new rules, a landlord who fails to protect a deposit may be fined and will lose his or her right to regain possession of the property by giving two months’ written notice. There are three schemes that can be used:

• The Deposit Protection Service (DPS) is a custodial scheme, which means the landlord pays the tenant’s deposit into the scheme. It is free to use and funded entirely from the interest earned on deposits held. For more information, visit www.depositprotection.com or call 0870 707 1 707
• Tenancy Deposit Solutions Ltd (TDSL) is an insurance-based scheme where the landlord keeps the deposit and pays a premium to the insurer. TDSL is partnership between the National Landlords Association and Hamilton Fraser Insurance. For more information, visit www.mydeposits.co.uk or call 0871 703 0552
• The Tenancy Deposit Scheme (TDS) is another insurance-based scheme, where the landlord keeps the deposit and pays a premium to the insurer. The scheme builds on a service established in 2003 to provide dispute resolution and complaints handling for the lettings industry. For more information, visit www.thedisputeservice.co.uk/ or call 0845 226 7837.