In the first of a series of articles in relation to Tenancy Deposit Schemes, we look at what Landlords need to do and why.
As you may know, since April 2007, it has been compulsory for Landlords to protect their Tenants’ deposits when new Assured Shorthold Tenancies (ASTs) are created.

What does this mean?

There are two types of Tenancy Deposit Schemes available, and it is up to the individual Landlord to choose which one he wants to join. Within each scheme are a number of approved scheme administrators.

  1. Custodial scheme: the Landlord pays the deposit into the Tenancy Deposit Scheme, and the scheme will look after it.
  2. Insurance-based scheme: the Landlord keeps the deposit, but pays special insurance to cover the deposit for the Tenant.

The principal objectives of the Tenancy Deposit Scheme are:

  • – To safeguard deposits for tenants;
  • – To provide a way of efficiently dealing with deposit disputes; and
  • – To encourage Landlords and Tenants to reach a clear agreement before tenancies begin in relation to the upkeep of the property.


I have protected the deposit, what next?

Not only does a Landlord needs to protect the deposit in a scheme, he must also comply with various other requirements.  For deposits received on or after 6 April 2012, the Landlord must comply with the “initial requirements” of the chosen scheme within 30 days of the date of receipt of the deposit.
The Landlord must also give his Tenant “prescribed information” within 30 days of receipt of the deposit.  The prescribed information includes:

  • – Generic information about the scheme that the Landlord has chosen;
  • – Specific information in relation to the Tenant’s deposit; and
  • – The facilities available under the TDS for enabling a dispute to be resolved.

The TDS has meant that Tenants are secure in the knowledge that they are protected from unscrupulous Landlords are not running off with their money, but of course on the down side, setting up new tenancies is now slightly more onerous for Landlords and there are strict penalties for non-compliance.

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