Is Your Landlord Complying with the New Tenancy Deposit Scheme?

Since 2007 all landlords that take on new tenants are meant to comply with the new Government approved Tenancy Deposit Scheme (TDS).  But since May 6^th this year, Landlords now have 30 days to place the deposit into a TDS.   Landlords are required to pay tenant deposits into a TDS and their tenants must receive information about the scheme.  Landlords must deposit the funds into the scheme within 30 days from the date of receipt.  There are only 3 organisations authorised to run these schemes and they are:

·         The Dispute Service (The TDS)

·         My Deposits (TDSL)

·         The Deposit Protection Service (DPS) the only custodial scheme

Landlords are required to hold deposits in one of these schemes for the life of the tenancy.

So what effect does this have on you as a landlord or tenant if it is not complied with? 

Well landlords who do not pay the deposit into a TDS or are late doing so may be prevented from repossessing the property as they will not be able to serve a valid Section 21 ‘notice to quit’ on the tenant in question.  So as a tenant, you should check you received the information about the scheme.  If the landlord definitely has not used the scheme he/she will only be able to evict you using Section 21 if one of these 2 conditions has been achieved: 

1) any claim brought by the tenant for not complying with the scheme has been resolved.
2) the landlord refunds all of the deposit money to the tenant or comes to an agreement with the tenant especially in circumstances where there has been damage to the property or the tenant owes an outstanding sum of rent to the landlord.   Tenants please be aware that as soon as the landlord has resolved or refunded your deposit YOU CAN BE EVICTED!

Furthermore, you should note that tenants can make an application to the court for the deposit to be paid into a TDS or returned to him/her and the tenant can also ask the court that the landlord pay him/her an amount anywhere between 1 and 3 times the amount of the deposit known as a penalty.  Landlords you need to be aware that tenants do have up to 6 years after the tenancy has ended to make an application with the court regarding their deposit.  The reason for this is that often it is not until the tenancy has ended that tenants become aware that the landlord had not complied with the scheme.

This published article may contain information of general interest about current legal issues, but does not give legal advice