TENANCY DEPOSITS

If you take a tenancy deposit from a tenant you are now required by law to protect it. The legal requirements about deposits and the information you need to give the tenant changed on 1st October 2015. 

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Tenancy Deposit Legislation

​This was introduced to ensure good practice around deposits and the make sure that tenants get their deposit back when they are entitled to it, and also to assist with any disputes that might arise.
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Deposit Protection

The two types of Deposit Protectionare: Custodial or Insurance backed schemes.
There are only three government approved deposit protection schemes. These are:

• The Deposit Protection Service: This is the only government approved custodial scheme
• My Deposits: This is an insurance backed scheme, originally aimed more at landlords, but can protect agents as well.
• Tenancy Deposit Scheme: This is an insurance backed scheme

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Alternatives

Some landlords and letting agents are looking for alternatives and these government approved schemes

1. You could not take a deposit. This option however does increase your risk if a tenant leaves owing money or having caused damage
2. You could take a Deposit Guarantee from Path in place of a deposit. Deposit Guarantee's are not covered by tenancy deposit legislation because no money changes hands at the start of the tenancy.

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