If you’re thinking of becoming a landlord, there are a few things you need to get your head around first –including what the deposit scheme for landlords is.
Before a tenant can rent a property and move in, they will need to hand over a security deposit, either directly to you (the landlord) or via letting agents in Warrington. This is to protect you in case the tenant breaks any terms of the rental agreement. And as long as tenants keep their side of the bargain, they will receive their deposit at the end of the tenancy.
Let’s take a closer look at the available deposit protection schemes, as well as the latest laws and benefits of such schemes for both landlords and tenants.
What is a Tenancy Deposit Protection scheme?
Since 2007, UK landlords that rent out their homes on an assured shorthold tenancy have been legally required to protect their tenant’s deposits in a government-approved tenancy deposit scheme.
The best way to think of a Tenancy Deposit Protection (TDP) scheme is as a financial safety net for landlords. If you are out of pocket at the end of the tenancy – whether it be because the rent hasn’t been paid or the property needs cleaning and repairs, you can use the deposit money to cover the costs.
Whereas, tenants will get their deposit back if theymeet the terms in the tenancy agreement, do not damage the property, and pay the rent and bills on time.
How do TDP schemes work?
There are 3government-backed schemes in England and Wales:
· Tenancy Deposit Scheme (TDS)
· Deposit Protection Service (DPS)
You have a custodial option that is free to use and the TDP provider will hold the deposit in a secure bank account. Or an insurance-based option where landlords are required to pay a fee and keep hold of the deposit in their bank account.
No matter which scheme you opt for, deposits from the tenant must be registered within 30 days of receiving them. And all tenants must be supplied with prescribed information, including details of the chosen deposit protection scheme and what happens if there is a dispute of any sort.
At the end of the tenancy agreement, the deposit must be returned within 10 days. Landlords are not entitled to retain a deposit or any part of it without giving explicit written reasons (and evidence) for doing so. This could be anything from unpaid rents or bills to stolen or missing belongings, damage to property and contents, negligence and lack of maintenance, unwanted belongings left behind, etc.
What are the benefits of TDP schemes?
Deposit protection is designed with the tenant’s best interests in mind. It safeguards their money and also offers a quick, easy and fair way of settling any disputes. For example, if they have kept your property in immaculate condition, they can be confident that their deposit won’t be withheld without good reasons.
However, one of the biggest benefits of deposit protection schemes is that each one comes with free, independent adjudication at the end of the tenancy. That means, if landlords and tenants disagree over what deductions should be taken from the deposit, an unbiased person can decide by looking at the evidence presented by both parties. This often includes the landlord’s inventory and photos of the property at the beginning and end of the tenancy.
Want to know more about deposit protection schemes?
You’ll find an abundance of information on the GOV.UK website, however, it might be worth seeking expert advice from letting agents, likeEasylet Residential, as well.
As leading letting agents in Warrington, they offer a comprehensive range of services for landlords, including a ‘let only’ service and full management packages. On top of this, they offer a variety of optional extras and – for just £50 – they can register your deposit with the Deposit Protection Scheme (DPS).