Tenancy deposit schemes
Tenancy deposit schemes

The following Property Disputes practice note provides comprehensive and up to date legal information covering:

  • Tenancy deposit schemes
  • What is an assured shorthold tenancy?
  • What is a deposit?
  • What are the requirements?
  • Insurance-based schemes
  • Custodial schemes
  • Dispute resolution
  • What happens if the landlord fails to comply?
  • Financial penalties
  • Possession proceedings
  • More...

Tenancy deposit schemes

Coronavirus (COVID-19): During the current pandemic, legislation and changes to practice and procedure in the courts and tribunals have been introduced, which affect the following:

  1. proceedings for possession

  2. forfeiture of business leases on the grounds of non-payment of rent

  3. a landlord's right to exercise Commercial Rent Arrears Recovery (CRAR) and enforcement agents taking control of goods

  4. service of various notices to recover possession of residential properties

  5. practice and procedure in the First-tier Tribunal (Property Chamber) and Upper Tribunal (Lands Chamber)

  6. insolvency legislation of both a permanent and temporary nature

For further information and guidance, see: Coronavirus (COVID-19)—implications for property.

All deposits taken by landlords for residential assured shorthold tenancies (ASTs) in England and Wales must be protected by a tenancy deposit scheme (TDS). The parties to an AST cannot contract out of the obligations.

There are two types of TDSs: insurance-based schemes and custodial schemes. They are intended to:

  1. allow tenants to get all or part of their deposit back when they are entitled to it and make any disputes easier to resolve

  2. encourage landlords and tenants to make a clear agreement from the start on the property's condition so that a landlord is not left out of pocket when a tenancy expires and a tenant leaves

It is for the landlord, as opposed to the tenant, to choose which scheme to use.

What is an

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