Tenancy Deposit Scheme TDS

If a deposit is not protected, the Landlord will be breaking the law. She/he will be unable to regain possession of the property using notice-only grounds for possession under Section 21 of the Housing Act 1988. The Tenant can apply for a court order requiring the deposit to be protected, or for the Prescribed information to be given to them.

If the court finds that the Landlord has failed to comply with these requirements, or that the deposit is being held in accordance with an authorised scheme, the court must either: Order the landlord to repay the deposit within 14 days of the issuing of the court order, or Order the landlord to pay the deposit into the designated account held by the custodial scheme administrator. The court must also order the Landlord to pay to the Tenant (or person who paid the deposit on his/her behalf) an amount equivalent to three times the deposit amount within 14 days of the making of the order

However, the following will not need to be registered with a tenancy deposit protection scheme:

Tenancy Deposit Scheme is now well established

SIGNIFICANT NUMBERS OF LETTING AGENTS HAVE NOW RESISTERED FOR THE TENANCY DEPOSIT SCHEME

Since the new rules came in April 2007, The TDS (Tenancy Deposit Scheme) has registerd well over 5,000 letting office to the scheme. The mandatory requirement under the Housing Act 2004 for all new Assured Shorthold Tenancies to be covered by one of the three schemes authorised by the government from the 6th April 2007.

Lawrence Greenberg the CEO of the Tenancy Deposit Scheme said "The industry has always had difficulty in establishing an accurate number of letting agents in England and Wales. However, with this number registered, it is fair to say that we have made significant inroads into ensuring that the agency side of the private rented sector is well coveredfor deposit protection and in a remarkably short space of time".

He went on to say " Too many in the industry, both agents and landlords left tenancy deposit protection to the very last minute".

Further details of all three scheme here

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History: Why was there a need for protecting deposits?

In the private sector many tenants have been giving their landlord a deposit against possible non-payment of rent or damage to property. When a tenancy comes to an end, if there is a disagreement about the return of the deposit, much hardship and inconvenience is suffered by both the landlord and tenant. From 6 April 2007, all deposits, up to the level of £25,000, taken by landlords for Assured Shorthold Tenancies in England and Wales (this covers the vast majority of tenancies), have had to be protected by a tenancy deposit protection scheme. From this date, tenants should ask their landlord about the details of the scheme when signing a new tenancy agreement. A landlord must advise the tenant in writing where and how the deposit is being held

Important - Please Note: With the new rules explained in the next section, if you are a private landlord it can be costly to try and hold the deposit yourself if you employ an agent just "find you a tenant". Many letting agents have decided to offer a scheme when you use their "let only - find a tenant service" although the rent is paid to you each month and you manage the property the agent will hold the deposit for you in the scheme they are registered with.

Paying an agent a £10 - £25 (approx) administration charge should be a lot less expensive than registering with the Tenancy Deposit Solutions Ltd insurance based scheme and paying their annual membership fee and using their "pay as you go" system whereby you have to pay each time you register a deposit.

The disadvantage of letting the agent hold the deposit will of course be if you don't want to let the agent know when the tenancy agreement ends and have to pay the agent for renewing the agreement and an extension to the let fee that many agents now charge.

If you let the property yourself you have other alternatives. You can use the The Deposit Protection Service (The DPS) whereby the custoldial scheme holds the deposit, or join the The Tenancy Deposit Scheme (TDS) or don't take a deposit at all, just more rent in advance. Remember with this final option of course if ther e is damage at the end of the tenancy you have no funds to deduct costs from your tenant.

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Please read on for details of all the schemes:

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Why was Tenancy Deposit Protection introduced?

Tenancy Deposit Protection will apply to all assured shorthold tenancies in England and Wales where a deposit is taken. Virtually all new contracts to let a property are assured shorthold tenancies. Tenancy Deposit Protection has been introduced:

Leaflets and posters for tenants, landlords and letting agents are available from the DirectGov website.

Example: A tenant pays a deposit of £1000. At the end of the tenancy, the landlord says he wishes to keep £200 to pay for replacing damaged furniture. The remaining £800 will be returned to the tenant.

The tenant disagrees, claiming the furniture was damaged when they moved in. Both agree to go to Alternative Dispute Resolution (ADR), so the disputed £200 will be transferred to the scheme administrator until the dispute is settled.

In each scheme, the deposit must be returned within ten days of the landlord and tenant agreeing how the deposit should be divided, or within ten days following notification of an ADR/court decision

What happens if there is a dispute?

Each scheme contains an Alternative Dispute Resolution (ADR) service. When a dispute occurs, and if landlord and tenant both agree to use the service, they will also have agreed to be bound by its decision with no recourse to the courts.

Disputes will only go to the courts if the landlord and tenant do not agree to use the ADR service.

In the custodial scheme, where a landlord or tenant does not co-operate in order to release the deposit, i.e. by not agreeing to the release of full or part of the deposit; and not agreeing to resolve the dispute through ADR or court, ADR will be the default way in which to resolve a dispute.

In the insurance-based scheme, where the landlord is contactable by the scheme but is refusing to co-operate with the scheme in terms of choosing ADR or the courts, it will be mandatory for the case to be referred to the scheme for resolution through its ADR service.

Will there be a charge for the use of ADR?

No, ADR is free of charge for landlords and tenants.

In the event of a dispute in the insurance-based scheme, what happens to the deposit?

If there is a dispute and the deposit is safeguarded by an insurance-based scheme, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.

The scheme administrator will divide the disputed amount in accordance with the ADR service's, or court's, decision.

For example, a tenant has paid £1000 as a deposit. At the end of the tenancy the landlord states that he wishes to retain £200 to pay for the replacement of damaged furniture, but the tenant disagrees, claiming the property was already in that condition when he or she moved in. If the landlord only wishes to retain £200, the remainder of the deposit (£800) has therefore been agreed to belong to the tenant and should be returned to him/her. The disputed £200 will then be transferred to the scheme administrator until the dispute is settled.

What happens if the landlord fails to transfer the disputed amount into the insurance-based scheme?

The scheme itself will pay the amount due to the tenant as a result of the ADR service's or court's decision. The scheme will then recover the money from the landlord.

In the event of a dispute in the custodial scheme, what happens to the deposit?

If there is a dispute, the scheme will continue to hold the amount until the ADR or courts decide what is fair. The scheme administrator will divide the disputed amount as a result of the ADR service's, or court's, decision.

The above information supplied by http://www.communities.gov.uk/ and is © Crown Copyright - jml Property Services hold a Core Licence C02W00008738

Click on for a review issued by the Government - April 2007

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28 August 2008

Tenancy Deposit Protection and the 14 Day Rule

by Dr David Smith of Pain Smith Solicitors*

There has been uncertainty for some time over the requirement to give a tenant notice of protection of a tenancy deposit within 14 days of the start of the tenancy. Section 213(5) of the Housing Act 2004 requires that the tenant is provided with the details of the scheme and the information prescribed by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. Section 213(6)(b) requires that this information be provided within 14 days.

However, the penalty of three times the deposit which is set out in section 214 of the Act does not appear to apply to the giving of notice within 14 days required by section 213(6)(b). This argument has raged between tenants and landlord for some time in a number of County Courts. In the case of Stankova v Glassonbury (Gloucester County Court, unreported) it was suggested (with reservation) that a failure to register within 14 days was sufficient to require payment of the penalty.

This matter was revisited more recently in Harvey v Bamforth (SheffieldCounty Court, unreported) and an appeal was made to a Circuit Judge which gives the decision greater weight. In this case the landlord started proceedings for rent arrears and the tenant responded by counter-claiming for three times the deposit for failure to provide the necessary information.

The landlord provided the said information before the tenant lodged their counterclaim with the Court but the tenant pursued their counterclaim. At appeal it was held that the provision of the prescribed information, although late, was acceptable. The Court did not clarify whether it was sufficient to provide the prescribed information prior to the tenant lodging their claim with the Court or before the hearing although most commentators feel that before the hearing is enough.

This decision clears up one important point, whether the tenant needs to be given the prescribed information within 14 days and makes clear that the 14 day limit is not absolute. However, the landlord in this case had registered the deposit within the 14 days although he had failed to provide proper notification. This case does not clear up the position where the landlord registers the deposit late as well although it is indicative that this may not be fatal.

As before the best advice is to register as soon as possible, even if late and work from there

*Dr David Smith is a trainee solicitor with PainSmith Solicitors, a niche practice specialising in residential landlord and tenant law.

PainSmith Solicitors Legal Advisors are provided for information only and are not legal advice. If you do have a legal problem, you should talk to a lawyer or adviser before making a decision about what to do.

PainSmith Solicitors Legal Updates are provided for information only and are not legal advice. If you do have a legal problem, you should talk to a lawyer or adviser before making a decision about what to do. You may wish to use the CLS/CDS Directory (www.justask.org.uk/public/en/directory) to locate an adviser. The information provided here is written for people resident in, or affected by, the laws of England and Wales only. You should note that date given in the update and be aware that the information given may become inaccurate due to changes in the law or its implementation.

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ARLA’s Response to the Law Commission Report - August 2008 and The Law CommissionHousing: Encouraging Responsible Letting

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Tenancy Deposit Protection - article by Dr David Smith of Pain Smith Solicitors April 2007*

Please click on the logo below to download this article in PDF format

* Article courtesy of PainSmith Solicitors are a niche practice specialising in Landlord and Tenant Law. Based in Medstead in Hampshire, they are ideally situated to provide an efficient service to clients nationwide as well as those based in Central London and the Home Counties.

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Tenancy Deposit Solutions Ltd announces fees for tenancy deposit protection scheme - PRESS RELEASE 5th March 2007

Tenancy Deposit Solutions Ltd (TDSL) has announced its tariff for landlords who join the tenancy deposit protection scheme. TDSL, which is sponsored by the National Landlords Association (NLA) and administered by Hamilton Fraser Insurance, is designed for landlords who wish to continue to hold deposits themselves, rather than transfer them into a custodial scheme. It will be mandatory for all landlords who take deposits for assured shorthold tenancies in England and Wales on or after 6 April 2007 to join a Government-authorised tenancy deposit protection scheme. Landlords will be legally required to protect the tenant's deposit and provide details of the scheme to the tenant within 10 days.

**NLA members: Scheme Joining Fee (per landlord) £47.00 - Non NLA members £58.75

Protection Fee (per deposit) NLA members £26.00 (first 4 deposits p.a., £30 thereafter) Non NLA members £30.00

Annual Scheme Renewal Fee: NLA members £14.70 for NLA Members & Non Members. Fees include VAT at the applicable rate

David Salusbury, chairman of TDSL, comments: "As we prepare ourselves for implementation of tenancy deposit protection on 6 April, the announcement of fees is an important milestone. We believe landlords will find the tariff attractive. Our insurance-based scheme will enable them to continue to hold deposits as at present, which gives a landlord a form of security against any damage that may occur during a tenancy. Many landlords feel that this stability contributes to the long term success of their business. Transferring funds into a custodial scheme could be a cumbersome alternative, particularly for a landlord with a substantial property portfolio."

"Paying a modest fee to protect a deposit is far better than being ordered by the Court to pay the tenant a substantial penalty of three times the amount of the deposit. That could amount to a massive £1,761 for each deposit that is not protected, based on the average deposit of £587."

** Correct at time of publication, for current fees visit www.mydeposits.co.uk.

Landlords can register with Tenancy Deposit Solutions to protect a deposit and find out more by visiting the TDS website www.mydeposits.co.uk.

For further information, landlords, tenants and other interested parties should visit: www.mydeposits.co.uk or www.communities.gov.uk

The National Landlords Association has members right across the United Kingdom, including five special corporate members, Birmingham Midshires, Bristol & West, Mortgage Express, Mortgage Trust and Paragon, and forty local authorities who are associate members. It protects and promotes the interests of private landlords of residential property and represents their views to government, local authorities and the media. The NLA seeks a fair legislative and regulatory environment for the private-rented sector while aiming to ensure that landlords are aware of their rights and responsibilities. It campaigns to raise standards in the sector whilst fostering a professional and amicable relationship between landlord and tenant

Hamilton Fraser Insurance is the trading name of HFIS plc, a long-established insurance broker, authorised and regulated by the Financial Services Authority. Hamilton Fraser provides insurance services to clients throughout the UK and is located in New Barnet, Hertfordshire. Hamilton Fraser is a major player in the highly specialised property insurance sector, and offers a tailored product, branded as "Landlord Solutions" to both residential landlords and managing agents, underwritten by AXA Insurance(UK) plc. The NLA and Hamilton Fraser have a long-standing relationship, with Hamilton Fraser offering its range of Landlord Solutions insurance products to members of the NLA.

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Tenancy Deposit Protection - article by Dr David Smith of Pain Smith Solicitors March 2007*

Please click on the logo below to download this article in PDF format

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NALS Press Release November 2006 Click Here

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Further information

The Tenancy Deposit Protection (TDP) means that as from April 2007 deposits will have to be placed in the authorised Tenant Deposit Scheme- Tenant Deposit Protection. These will either be in "custodial" or "insurance" schemes which will be run by independent third providers. These schemes will be able to help resolve disputes. Landlords who take deposits will have to join a scheme. If they don't they risk having to pay a penalty of three times the deposit to the tenant.

In the Custodial scheme landlords will pay deposits into an account where it will stay until the tenancy ends, when either party can apply to have it returned. Once the landlord and tenant agree on how it should be split the scheme adminitrator pays out.

The insurance scheme is more complex in that the deposit will be kept by the landlord on the basis that when the tenancy ends, the amount agreed between landlord and tenant will be paid out to the tenant.

The insurance only comes into effect if at the end the tenancy the landlord doesn't pay back part or all of the deposit. If this happens, the tenant can ask the administrator to step in and the landlord will have to pay the amount in dispute into an account until the dispute is settled. The insurance will pay out if the landlord fails to pay the deposit into the account.

N.B. This information should not be relied on for accuracy and is presented here without the responsibility of jml Property Service and the website it is being displayed at. ©jml property Services 11-05

General Note: Reference below to "landlord" should also be taken to include any other person that takes the deposit on the landlord's behalf i.e. a letting agent.

A. So that, when a tenant pays a deposit, and he or she is entitled to get all or part of it back, the tenant can be assured that this will happen.

A. No. Most landlords deal fairly with tenancy deposits and are already acting responsibly by safeguarding deposits. However, these provisions need to be put into place to ensure the minority of bad landlords to act responsibly by safeguarding tenancy deposits. TDP puts into place a simple process for all landlords to ensure tenancy deposits are safeguarded. This is in the interests of both landlords and tenants.

A. All deposits taken by landlords in relation to assured shorthold tenancies ("AST") - the most common form of new tenancy - in England and Wales.

Q.4 What is the average deposit for an assured shorthold tenancy in England?

A. The most recent Survey of English Housing (05/06) found that the average deposit for an AST in England is £695.

A. There will be two types of scheme: a custodial scheme and one or more insurance - based schemes. The landlord - not the tenant - will have the option to choose whether to safeguard the deposit in the custodial or insurance-based scheme. A landlord will have 14 days to safeguard a deposit from the day he receives it. The landlord will have to provide the tenant prescribed information about the scheme safeguarding the deposit within these 14 days. To avoid disputes having to go to the courts, both schemes will be supported by an alternative dispute resolution (ADR) service - although the use of this will not be compulsory.

A. Within 14 days of receiving a deposit, landlords will have to provide tenants will details of which scheme is protecting the deposit. The scheme will be able to confirm if the deposit is protected. Details of the scheme administrators, and how to contact them, will be available once the contracts have been awarded, later in this year.

A. A competitive tendering exercise, under European Union procurement rules, is underway to select suppliers to run the schemes.

A. Detailed negotiations with short-listed suppliers have recently been completed. The Government expects to be in a position to award contracts for a custodial scheme, and one or more insurance-based schemes, later this year.

A. The tenant will pay the deposit to the landlord as now. But - and here's the difference with the insurance-based scheme - the landlord will then pay the deposit into the custodial scheme. At the end of the tenancy, if the landlord and tenant agree how the deposit should be allocated, they will tell the scheme, which will pay out the money as agreed.

Q.11 What happens if the landlord or tenant cannot contact the other party to obtain agreement or where one party is being un-cooperative?

A. A 'single claim' can be submitted in these circumstances. Where a landlord cannot contact the tenant, he may submit a single claim indicating the reason for the claim, ie due to rent arrears or damage, providing evidence. Where a tenant cannot contact the landlord and makes a single claim, no other reason is required, as the deposit is the tenant's money. Where a landlord or tenant is contactable but one party refuses to co-operate in order to release the deposit, ie by agreeing deposit release or agreeing to resolve any dispute via ADR or court, a single claim can be made. Refer to Q.22 for what happens in the event of a dispute.

Q.12 Will landlords have to pay to transfer the deposit to the custodial scheme?

A. Deposits held in the custodial scheme will earn interest which will go to the contractor to pay for the running of the scheme. The remainder will be used to pay interest to the tenant/landlord. Where the deposit, or part of it, is divided between the landlord and tenant the interest will be allocated pro-rata.

Q.14 Will the addition of interest on the deposit affect a tenant's entitlement to housing benefit?

A. Whilst the deposit is being held under the custodial scheme, the tenant is unable to use the deposit and any interest accrued. As a result during the period of the tenancy the interest that accrues will be disregarded for the purposes of housing benefit. However, at the end of the tenancy the position may change. When the deposit and any interest is returned to a housing benefit claimant, provided that a claimant's capital remains under £6K then the capital will continue to be disregarded. If the deposit and the interest received raises the claimant's capital to over £16K then benefit will cease to be paid. In practice, however, since it is likely that the deposit will be transferred to a new tenancy the returned deposit plus any accrued interest may only have a minimal, if any, effect on entitlement to benefit. Insurance-based Scheme

A. The tenant will pay the deposit to the landlord as now. The landlord will retain the deposit and participate in insurance arrangements which will assure the return of the deposit (or part of it) to the tenant when he or she is entitled to it. The precise nature of these arrangements will be determined by the outcome of the current tender process. Refer to Q.23 for what happens in the event of a dispute.

Q.16 Will a landlord pay for the deposit to be covered by an insurance-based scheme?

A. Yes. Landlords will pay a fee to belong to an insurance-based scheme. This will safeguard the deposit, should it be misappropriated.

Q.18 Will the proposed insurance-based scheme be open only to landlords who are members of a trade body or professional organisation?

A. No. The use of any scheme will not be dependent on membership of any trade body or professional organisation

A. Each scheme will contain an alternative dispute resolution (ADR) service. when a dispute occurs, and if landlord and tenant both agree to use the ADR service, they will also have agreed to be bound by its decision with no recourse to the courts. Disputes will only go to the courts if the landlord and tenant do not agree to use the ADR service. In the custodial scheme, where a landlord or tenant does not co-operate in order to release the deposit, ie by not agreeing to the release of full or part of the deposit; and not agreeing to resolve the dispute through ADR or court, ADR will be the default way in which to resolve a dispute. In the Insurance-based scheme, where the landlord is contactable by the scheme but is refusing to co-operate with the scheme in terms of choosing ADR or the courts, it will be mandatory for the case to be referred to the scheme for resolution through its ADR service.

Q.24 In the event of a dispute in the insurance-based scheme, what happens to the deposit?

A. If there is a dispute and your deposit is safeguarded by an insurance-based scheme, your landlord will not be able to keep hold of the amount in dispute until the dispute is settled. Instead, the landlord will be required to transfer to the scheme administrator the amount of the deposit that is in dispute. The scheme administrator will divide the disputed amount in accordance with the ADR service's, or court's, decision. For example, say that a tenant has paid £1000 as a deposit. At the end of the tenancy the landlord states that he wishes to retain £200 to pay for replacing damaged furniture, but the tenant disagrees claiming the property was already in that condition when he or she moved in. If the landlord only wishes to retain £200, the remainder of the deposit (£800) has therefore been agreed to belong to the tenant and should be returned to him/her. The disputed £200 will then be transferred to the scheme administrator until the dispute is settled.

Q.25 What happens if the landlord fails to transfer the disputed amount into the insurance-based scheme?

A. The scheme itself will pay the amount due to the tenant as a result of the ADR service's or court's decision. The scheme will then recover the money from the landlord.

Q.26 In the event of a dispute in the custodial scheme, what happens to the deposit?

A. The deposit will of course be held in the custodial scheme already. If the landlord and tenant cannot agree how the deposit should be divided, the disputed amount will remain in the scheme. The scheme administrator will divide the disputed amount as a result of the ADR service's, or court's, decision.

A. When the landlord and tenant agree how the deposit should be returned, in full or in part, it must be paid back within 10 days. In the custodial scheme: within 10 days of the scheme being notified of agreement between the landlord and tenant or notified of an ADR/court decision. In the insurance-based scheme: within 10 days of the tenant requesting that the landlord return his deposit or, where there is a dispute, within 10 days of the scheme being notified of the ADR service's, or court's, decision.

A. Yes. 10 days is the maximum. In practice, DCLG would like to see deposits returned more quickly and will be working with potential scheme administrators to see how this can best be achieved. Many landlords currently pay the deposit back on the last day of the tenancy. In the insurance-based scheme, if the landlord and tenant agree on the amount to be returned, the deposit can be returned on the last day of the tenancy.

A. Currently, a landlord can obtain an order for possession of an AST at any point after the first six months of the tenancy providing any fixed term has expired and the landlord gives the tenant at least two months' written notice (Under Section 21 of the Housing Act 1988). This is known as 'notice-only'. However, under TDP, the landlord is unable to regain possession of the property using the usual 'notice only grounds', if the deposit has not been safeguarded within 14 days of the landlord receiving it. Tenants can also apply for a court order requiring the deposit to be safeguarded or the prescribed information to be given to him about the scheme in which the deposit is safeguarded. Where the court believes that the landlord has failed to comply with these requirements, or the deposit is not being held in accordance with an authorised scheme, the court must either order the landlord within 14 days of the making of the order to repay the deposit; or order the landlord to pay the deposit to the custodial scheme administrator. The court must also order the landlord to pay to the tenant a fine of three times the deposit amount within 14 days of the making of the order.

Q.30 What if a tenant moves out of their home before realising that their deposit hasn't been protected?

A. The tenant will need to apply for a court order and the court will order the landlord to repay the deposit amount to the tenant. In order to avoid this situation, tenants should make sure that their landlord has given them the prescribed information relating to the scheme that is safeguarding their deposit, and check that the deposit is safeguarded, within 14 days of paying the deposit.

Q.31 How will this affect deposits paid for ASTs which start before 6 April 2007?

A. The legislation will only apply to new deposits paid for ASTs entered into on or after 6 April 2007. Any deposit paid before this date will not need to be safeguarded by a tenancy deposit scheme. What happens if the tenant renews their contract after 6 April 2007? If the tenant decides to remain in their existing rented property beyond the initial fixed term of 6 months, how the deposit is treated will depend on how the tenancy is continued: Periodic tenancy - ie the tenancy continues with no new agreement - TDP will not apply, as no new AST will have been created. Replacement tenancy - ie a new AST is created between the same landlord and tenant for the same property on substantially the same basis, - TDP will apply to the initial deposit that was paid prior to 6 April 2007.

A. Other options have always been open to landlords but most landlords will want to continue to take a deposit in order to protect their interests. Existing Deposit Schemes Q.33 Where do these provisions leave organisations that already have voluntary schemes up and running? TDP will replace voluntary schemes. Voluntary schemes will not be permitted to take new deposits in England and Wales from 6 April 2007. Any private organisation was eligible, under the competitive tendering process, to submit a bid to run a scheme. DCLG recognise the specialised knowledge that such organisations have and they were welcome to submit bids in response to the two Notices published in the Official Journal of the European Union in August 2005.

Q.34 Some local authorities operate rent deposit schemes. Will these be covered by TDP?

A. It depends. Where a rent deposit scheme actually pays money to the landlord on behalf of the tenant, then this will need to be protected by TDP. However, where the rent deposit scheme offers a letter of guarantee, no money passes to the landlord, so TDP will not apply.

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NALS AGENTS WELL PLACED TO MEET NEW CUSTODIAL REQUIREMENTS SET BY GOVERNMENT (Press Release November 2006)

The National Approved Letting Scheme (NALS) has welcomed the much-awaited announcement from the Government over the awarding of contracts to operate the new Tenancy Deposit Schemes coming into effect in April 2007. NALS has reassured member firms of their strong position in terms of being able to access an insurance based scheme and continue to hold deposits if they choose to do so.

NALS chair Caroline Pickering said: “Firms which have recognised the long term benefits of being part of a Government backed accreditation scheme will now be able to access the statutory Tenancy Deposit Schemes. We are currently in discussions with The Dispute Service Ltd1, which has been awarded a contract, on the review we are undertaking of NALS Client Money Protection arrangements, to ensure our cover for accredited firms fully meets their requirements. We will also be interested to learn more about the scheme operated by the National Landlords Association (NLA)2 which we understand agents can also access. With the legislation coming into effect in April 2007, agents who are not part of NALS or a professional body should be looking at the way in which they operate their business if they wish to continue to hold deposits."

Pickering’s commitment to NALS firms and driving industry best practice doesn’t stop there - recently aboard as the new voice of NALS, she’s keen to push further ahead in driving up standards in the private rented sector:

“This move by the Government has been a long time coming for the industry with around 60 per cent of firms totally unregulated. These new requirements raise the bar for those who have never come under any form of regulatory umbrella and if they want to avoid the position of having to tell landlords that they are not allowed to hold deposits, as they do not meet scheme requirements, they should act now. We’re continuing to work to actively support accredited firms to highlight the benefits of seeking out an agent who displays our logo.”

NALS is backed by the Government and leading professional bodies and is the most reliable benchmark for landlords and tenants to compare the standards of service they receive from residential lettings agents. All members of the scheme offer client money protection cover, maintain professional indemnity insurance and operate professional customer complaints procedures.

1. The Dispute Service Limited will run an insurance-based scheme, directed primarily at letting agents. It will also run the scheme’s Alternative Dispute Resolution service.

2. The National Landlords Association is the UK’s largest private rented sector landlord association and has members across the United Kingdom. It protects and promotes the interest of private residential landlords and represents their views to government, local authorities and the media. The NLA seeks a fair legislative and regulatory environment for the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities. It campaigns to raise standards in the private rented sector whilst fostering a professional and amicable relationship between landlord and tenant.

The National Approved Letting Scheme board comprises: Caroline Pickering (Chair), representatives from RICS, ARLA and NAEA who are Directors of the Scheme, alongside representatives from DCLG, the BPF and the Housing Corporation.

The National Landlords Association (NLA) is delighted to announce that, in partnership with Hamilton Fraser Insurance (HFIS plc), it has been awarded a government contract to operate an insurance-based tenancy deposit protection scheme. The NLA will sponsor the scheme which Hamilton Fraser will administer.

The Housing Act 2004 requires the Government to introduce mandatory tenancy deposit protection. With effect from 6 April 2007 any landlord taking and holding a deposit on an Assured Shorthold Tenancy (AST) in England and Wales will by law be required to be a member of such a scheme.

The scheme will safeguard tenants’ deposits, ensure that they get part or all of their deposit back at the end of the tenancy if they are entitled to, and offer an alternative way of resolving disputes.

“Our key corporate objective is to nurture and encourage a professional private-rented sector. We support initiatives aimed at preventing malpractice among the small minority of rogue landlords who wrongly withhold deposits”, said David Salusbury, Chairman of the NLA. “The award of a government contract to run such a scheme is a major step forward for the NLA and reflects the growing professional role of the Association”.

The Scheme will be the only tenancy deposit protection scheme that is specifically designed for landlords wishing to hold deposit money themselves during a tenancy. Lettings agents and other third parties acting on behalf of landlords, as individual landlords, will be eligible to join the NLA scheme.

David Salusbury continued: “Taking a deposit against unreasonable damage to a property is one of the few safeguards open to landlords. We have a scheme that enables landlords to hold tenancy deposits in a manner that is fair and equitable to both landlord and tenant. We hope that all those involved in the market will welcome this development as a positive contribution to the well-being of the private-rented sector”.

Eddie Hooker, Managing Director of Hamilton Fraser Insurance, the administrators of the scheme, said: “After an exhaustive 18-month procurement process, we are delighted to have been awarded the contract. In our experience, as major suppliers of property and rent guarantee insurance to residential landlords, we see a significant number of claims for damage to properties caused by a minority of tenants and for non-payment of rental income. Our scheme allows the landlord to retain control over the deposit he receives from the tenant, which for many landlords is the most important safeguard against damage to the property and any other such problems that might arise”.

David Salusbury concludes: “This important new initiative gives us the opportunity to further our aim of raising standards in the private-rented sector, for the benefit of both tenants and landlords”.

The National Landlords Association, founded as the Small Landlords Association in 1973, has members right across the United Kingdom, including five special corporate members, Birmingham Midshires, Bristol & West, Mortgage Express, Mortgage Trust and Paragon, and forty local authorities who are associate members. It protects and promotes the interests of private landlords of residential property and represents their views to government, local authorities and the media. The NLA seeks a fair legislative and regulatory environment for the private-rented sector while aiming to ensure that landlords are aware of their statutory rights and responsibilities. It campaigns to raise standards in the private-rented sector whilst fostering a professional and amicable relationship between landlord and tenant.

jml Property Services are members of the National Landlords Association in the UK

TDS Announcement article from Pain Smith Solicors Click Here This information courtesy of PainSmith Solicitors who are a niche practice specialising in Landlord and Tenant Law. Based in Medstead in Hampshire, they are ideally situated to provide an efficient service to clients nationwide as well as those based in Central London and the Home Counties

*See also Energy Performance Certificates in Let Property - 29 January 2008 Click Here

jml Property Services are members of the National Landlords Association in the UK and British Chamber of Commerce Cote d'Azur - France