When renting a property, the tenant is asked to submit a deposit. The amount is a preventative measure for property damage, structural harm, and other dents to the property. Here is everything you need to know about UK deposit protection schemes that safeguard renters and property owners equally.
Unfortunately, deposit protection schemes are a complicated topic for tenants and landlords. Over the years, the complications have increased in property dealing, which has caused much confusion. The parties constantly wonder where to keep the deposit, its amount, and the corresponding cost deduction.
If you are a landlord struggling with deposit movements, you are not the only one. 6 in 10 landlords struggle with deposit management and dispute resolutions. To minimise the challenges, the government has introduced many deposit protection schemes in the UK, which are under the microscope today.
One of the reasons deposit protection schemes in the UK were necessary was to protect the public against the bank’s financial let-downs. The programs minimise economic uncertainty. Moreover, they also build confidence between the landlord, tenant, and bank.
The Tenancy Deposit Protection Scheme is the longest-running government-approved program in England and Wales. The Dispute Service Limited supervises the scheme. Tenancy Deposit Protection Scheme was founded in 2003 as a not-for-profit scheme.
The deposit scheme is based on the Housing Act 2004, which insists landlords and agents safeguard the received deposits. In other words, the landlord is held accountable for placing the deposit in a government-approved program. However, the guidelines only apply if you rent the home on short-term tenancy after 6 April 2007.
In addition, the program applies to non-monetary items too. Instead of money, the landlord will consider costly possessions, like a watch, a vehicle, or jewellery, as a deposit. The Tenancy Deposit Protection Scheme will also protect these items.
When the tenancy is over, the individual can request their deposit if:
The items or the amount must be deposited under the Tenancy Deposit Protection Scheme 30 days from the receiving date. At the end of tenancy, the landlord is legally liable to return the deposit within ten days of the agreed date.
If disputes arise, the Tenancy Deposit Protection Scheme protects the deposit. It is transferred or returned when the matter is resolved.
If the tenant has paid the deposit at the beginning of renting the property, then they are legally obligated to get it back. However, the letting agent or landlord will deduct the amount for valid reasons such as harming the property.
The tenant must contact the landlord when the tenancy ends to return the deposit. If a letting agent manages the residual property, you should contact them. The best strategy is to email or write a formal request. This offers proof you may need to present later.
The tenant is advised to leave the property in good condition. Moreover, they must also take photographs if they foresee a surfacing dispute. The photographic evidence will help the renter argue that they must receive the deposit in full amount. Here is the guideline
The landlord or letting agent will deduct the amount in the following scenarios
The landlord will justify the deduction and provide a reason in writing. However, the owner cannot deduct the deposit for natural wear and tear, such as furniture used.
In addition, the landlord or the letting agent cannot deduct the deposit if the tenant:
The DPS-insured scheme is a sub-category of the Tenancy Deposit Scheme. It offers insured and custodial protection. Moreover, the program also acts as an adjudicator to resolve conflicts between the parties. But what is DPS insured scheme?
The DPS-insured scheme is free to join as a landlord or an agent. The individual pays a small amount to the Tenancy Deposit Scheme regulatory body to supervise the transaction. As a result, the deposit stays safe in the bank account as long as the property is rented. Moreover, DPS insured scheme applies to the accrued interest too.
TDS is cost-effective to insure deposits to England and Wales residents. Its reputation and credibility are unmatched.
The provider is committed to excellent service. They offer prompt responses to emails and calls as each client is important to them.
Since TDS insured is created for public protection, the profit is invested internally. In other words, the amount you pay for deposit protection contributes to improving operations.
You can protect the deposit in three easy steps:
If the landlord is making matters difficult, ask them the reasons for deductions and the corresponding calculations. You can complain to the Tenancy Deposit Scheme, where landlords or letting agents submit the deposit as an assured shorthold tenancy.
If you are interested in renting a property, contact TRPE- The Real Property Experts today. We will find you the ideal home or flat in workplace proximity, excellent school districts, and other requirements you may have. TRPE is a team of dedicated property experts who regularly deal with international and local clients. Call the London office at +44 0 2077 232 393.
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