Tenancy deposit schemes
Tenancy deposit schemes

The following Property guidance 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 initial requirements?
  • Insurance-based schemes
  • Custodial schemes
  • Alternative dispute resolution
  • What happens if the landlord fails to comply?
  • Late compliance
  • Deregulation Act 2015
  • more

STOP PRESS: On 14 December 2017 the Law Commission announced its 13th Programme of Law Reform. The areas chosen for review include the increased regulation of managing agents (with the scope of this to be decided following a Ministry of Housing, Communities and Local Government consultation), the potential to utilise unfair terms legislation to allow leaseholders to challenge unfair lease terms such as ground rents, fixed service charges and fees payable on assignment, a simplification of enfranchisement procedures (purchasing the freehold and lease extensions) and how to make the valuation fairer and more transparent and a review of why commonhold failed and the reforms required to enable it to operate successfully. The anticipated timescale for these reviews is between 12 months and 2.5 years. For further information see: LNB News 14/12/2017 69.

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, namely 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 a property's