By Craig Smith

When the law was changed back in 2007 it meant that any deposit taken for an Assured Shorthold Tenancy needed to be protected. There were 3 schemes set up that could offer this service, each working in a slightly different way but all with the same goal in mind. (There are now 4 but more news on that later!)To ensure that tenants’ deposits are properly protected.

Each of the schemes have their own set of rules and terms & conditions but the law governs that the deposit should be protected within 30 days of receiving it. Each Landlord or agent tends to stick to one of the schemes, knowing that all of the deposits that they take are in one place which makes everything that little bit easier to deal with. Although there is no right or wrong answer, which scheme do you think is best?

MyDeposits

Unfortunately, Castle Estates have never used My Deposits but there are a few of our tenant find Landlords that do use them. This is a ‘pay as you go’ service where any Landlord or agent has to pay a registration fee per deposit registered. The current prices for individual Landlords start from a £36 joining fee and £18-£24 per deposit, depending on the amount of the deposit.

Depending on the amount of deposits registered, this could turn out to be costly for a Landlord but the money can still be held by the Landlord themselves. My Deposits is what is known as an insured scheme where only the details of the deposit are registered.

Should any deposit deductions go to dispute and the adjudication service is used, they aim to resolve any disputes within 15 days which does seem very speedy.

The Dispute Service (TDS)

TDS is another insured scheme and offers a similar service to My Deposits. Castle Estates did use this scheme when the legislation first came in to place and continued to do so for around 3 years. It was only when the agent registration fees were hiked up, by around 400% in some cases, that the decision was made to switch to another.

Although we haven’t used this for 3 years since, they do now say that there is no joining or administration fees for Landlords. This is another insured scheme so the Landlord can keep hold of the money themselves, although if a dispute is raised the amount in dispute then needs to be paid over to them so they can pay it to the relevant party when a decision is made.

The Deposit Protection Service (DPS)

The DPS now offer an insured scheme, working in much a similar way to those above, running alongside their original custodial scheme. The custodial is basically what it says it is, any deposit monies registered are held physically by the DPS rather than sitting in the Landlords account. Currently, they are the only organisation who offer the custodial service.

This can put a lot of minds at rest, both for Landlords and tenants. There was one agency in our local area a few years ago who ceased trading for one reason or another and we had a number of their Landlords approach us who didn’t know where the deposit was. Some of the deposits were registered in an insured scheme and there is some protection offered but within a certain timescale. Some tenants didn’t realise what had happened until too late and ended up losing out.

As the DPS can hold the money themselves, should a Landlord (or tenant for that matter!) disappear without trace, the money is still held securely.

Your Choice!

So there we have it. There is no right or wrong answer as to which scheme a Landlord should use and everyone will have their own personal choice. The point is, each scheme has the same goal in mind; to protect the deposit that is held in line with the Housing Act 2004 legislation.

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