If you are charging rental deposits to private tenants then you are legally obligated to hold their deposits in a government backed scheme.
Letting agents and businesses in England and Wales have to follow a very clearly defined mechanism for protecting tenancy deposits. Current legislation dictates you must hold tenant deposits in one of three government backed schemes specifically the Deposit Protection Services (DPS), MyDeposit and the Tenancy Deposit Scheme (TDS). Failing to protect deposits can leave you open to legal action, often with a far higher liability than the initial deposit amount. At present legislation specifies you must transfer tenant deposits to one of the three schemes within 30 days of receiving it.
The role of the tenancy deposit protections schemes is to ensure that tenants get their deposits back if:
- They meet the terms of your tenancy agreement
- They don’t damage your property
- They pay your rent and bills
At the end of the tenancy agreement you must return the deposit within 10 days of agreeing any deductions (due to any property damage). If you are in dispute with your tenant over the final amount then the deposit will remain in the scheme until a mutually agreeable amount can be finalised.
If you have not correctly protected tenant deposits then you may be liable for a far greater amount than the original deposit. Our role is to help you check you have correctly protected your tenant deposits.