Here is the latest information on the The Deposit Protection Scheme.
Landlords Advised That Tenancy Deposit Protection Changes Will Come Into Effect From April 2012
Changes to the Tenancy Deposit Protection (TDP) regulations will come into effect in England and Wales from 6 April 2012 following a review by The Department for Communities and Local Government (DCLG). I Am The Agent, the fixed fee letting agency is advising all landlords to familiarise themselves with the changes to the scheme well ahead of the 6th April implementation date. The changes will need to be observed by every landlord, whether he or she is renting a single private property to a short term tenant or is a seasoned property investor with a varied private rental property portfolio.
The changes to the existing tenancy Deposit Protection requirements will also bring into force new and tougher penalties for landlords not complying with tenancy deposit protection legislation. The new legislation will be applicable across all three approved TDP schemes (Deposit Protection Service (DPS), MyDeposits, Tenancy Deposit Scheme (TDS))
Set out under the Localism Act, the main changes to the TDP law can be broadly defined as:
1. Landlords will be given an increased period of 30 days (up from 14 days previously) from receipt to submit the deposit to a recognized protection scheme and provide the relevant information to the new tenant.
2. The Court will be given the power to determine the penalty payment (up to a maximum of three times the value of the deposit) where landlords fail to comply with the new legislation
3. Even if the landlord later complies with the legislation, the penalty payment must still be paid
4. Tenants will be given the right to apply to the Courts for penalty payments even if their tenancy agreement has come to an end
5. Landlords failing to comply with the new legislation within the allocated 30 day period will not be allowed to serve a Section 21 Notice until the deposit is returned in full (or with previously agreed deductions in the event of damage to the property) or until the claim made by the tenant is decided, settled or withdrawn.
For the first time, landlords in Scotland will also be required to use a Tenancy Deposit Protection service for their private property rentals thanks to the new changes. The first approved scheme is expected to be announced at the end of the month.
Devised by the UK government, Tenancy Deposit Protection schemes are designed to protect tenant deposits when they rent a property by requiring landlords to place the funds with a neutral intermediary. The schemes guarantee that the tenant will receive their deposit back at the end of the tenancy, providing that no damage has been made to the property during their tenure. The TDP requirement is applicable for all short term tenancies which started after 6 April 2007.
Tenancy Deposit Protection schemes are categorised as being custodial or insurance based – the requirements for each differ and not everyone is eligible to opt into an insurance based scheme. For those who are advertising a property online and are confused about the TDP requirements and options, enlisting the services of a specialist fixed price property management service such as I Am The Agent can ensure that the tenancy is legally compliant, avoiding the risk of unwanted penalty charges and possible court action.
To find out more about I Am The Agent and services for landlords including property management visit http://www.iamtheagent.com