Investment Property Accountants - WARR & CO

Investment Property Accountants

Tenancy Deposit Scheme Changes

With effect from 6th April 2009, Tenancy Deposit Protection will be withdrawn from unregulated letting agents

Tenancy deposit protection is designed to ensure that: -

  • A tenant will get all or part of a deposit back when they are entitled to it.
  • Any disputes between the tenant and landlord or agent are easier to resolve.
  • Landlords and letting agents that do not protect tenancy deposits have to pay their tenant back three times the original deposit

The Tenancy Deposit Scheme, run by The Dispute Service, will, at the insistence of their insurers, only provide deposit protection and alternative dispute resolution to letting agents that are members of recognised professional bodies.

From 6th April 2009, only regulated letting agents and corporate and individual landlords will be covered by the Tenancy Deposit Scheme and cover will be withdrawn from unregulated agents. Tenants are advised to ensure their landlords have made alternative arrangements to safeguard deposits as soon as possible.

The Scheme advises landlords and tenants to be certain either that their lettings agents are members of either the Association of Residential Letting Agents (ARLA) , The National Approved Lettings Scheme (NALS) , the National Association of Estate Agents (NAEA) , or the Royal Institution of Chartered Surveyors (RICS); or that deposits are protected under one of the other government authorised deposit protection schemes: Tenancy Deposit Solutions (trading as or The Deposit Protection Service .

The Tenancy Deposit Scheme intends to write to all its members who are unregulated agents to inform them that they will have to make alternative arrangements to protect deposits when their subscriptions end in April. It also intends to contact current tenants whose tenancy is shown to have been arranged through an unregulated agent to advise them of the change in protection that can be offered and the course of action to take to ensure protection as the law requires. The agents concerned should be advising their tenants and landlords of what they intend to do on their behalf.

The Tenancy Deposit Scheme states that it regrets the action it has been forced to take, but points out that it is due to circumstances that are well beyond its control.

Date of Article: 15th January 2009

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