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TENANCY DEPOSIT LEGISLATION
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Introduced to protect the tenancy deposit from unfair or unnecessary dilapidation deductions.
From April 6th 2007 all deposits paid at commencement of a new tenancy must be registered with or paid into a tenant deposit scheme within 14 days of receipt. This includes existing tenancies where the tenancy agreement is renewed on expiry.
Failure to protect a deposit with a government-authorised tenancy deposit scheme carries penalties for the landlord:
* The landlord will be unable to use ‘notice-only grounds’ to regain possession of the property (under Section 21 of the Housing Act 1988)
* The tenant can apply for a court order requiring the deposit to be protected and confirmation provided to you.
* If the landlord fails to comply with these requirements, or if the deposit is not protected by an authorised scheme, the court will order the landlord to repay the deposit to the tenant or to pay the deposit into an authorised scheme.
* The court will also order the landlord to pay the tenant compensation of three times the deposit amount, payable within 14 days.
The Government awarded contracts to three companies to run tenancy deposit protection schemes as follows:
Tenancy Deposit Solutions Ltd
www.mydeposits.co.uk
An insurance backed scheme where the deposit can be held by the landlord or the landlord’s agent for the term of the let.
The Tenancy Deposit Scheme (TDS)
www.thedisputeservice.co.uk
Also an insurance backed scheme for landlords and agents.
The Deposit Protection Service (The DPS)
www.depositprotection.com
A free custodial scheme – the deposit is held by the scheme for the term of the tenancy. However, if the tenant unlawfully offsets the last months rent against the deposit and subsequently disappears without authorising release of the deposit a court order will be necessary to do so, for which an application will take months to obtain and incur costs.
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