what is a tenancy deposit?
A tenancy deposit is the money held by the landlord to protect himself against a financial loss in the event that the tenant fails to meet the obligations agreed at the commencement of the tenancy.
The tenancy agreement will detail what the tenant is expected he can and cannot do but until recently the landlord had little restraint when it came to returning the deposit to his tenant. This could lead to the tenant losing a sum of money that was rightfully his and had little redress other than court action to reclaim it.
deposit protection
Since 6 April 2007 money paid by a tenant as a deposit must be protected by a government approved Tenancy Deposit Scheme of which currently there are three - two insurance based where the deposit is insured and held by the landlord or his agent and one custodial where the Scheme itself holds the deposit money.
When the tenancy ends the landlord and tenant should still agree to the return of the deposit but where they cannot agree then the Scheme that protects the deposit decides the outcome of the dispute. The insurance policy will pay the tenant in the event that the deposit has been misused by the landlord or refuses to follow the decision of the adjudicator.
failure to protect the deposit
If a deposit has not been protected by an Approved Scheme the landlord faces paying his tenant 3 times the deposit amount and will not be able to serve a 's21' notice requiring possession of the property until it is protected
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the Dispute Service tenancy deposit scheme
Property Link Estates is a member of the Dispute Service Limited - an insurance based scheme allowing tenancy deposits to be held by us in our bonded clients account.
Occasionally a landlord will belong to a Tenancy Deposit Scheme themselves in which case your tenancy deposit will be held by the Landlord under the rules of their Scheme membership.
For further information on the Dispute Service Limited, how the deposit is protected and disputes handled please refer to the leaflet What is the Tenancy Deposit Scheme? an explanatory leaflet for landlords and tenants
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