Tenancy Deposit Scheme – what is it?
TDS (Tenancy deposit Scheme) is a government approved tenancy deposit protection scheme in England and Wales. The Housing Act 2004 requires all landlords/letting agents to protect deposits on assured shorthold tenancies in a deposit scheme. This scheme is to protect both the landlord and the tenant and offers two different types of deposit protection schemes.
Insured Scheme
The insured scheme is where the landlord or agent holds the deposit during the tenancy and the landlord or agent pays a fee to the TDS. But it must give it to the scheme at the end of the tenancy if there is a dispute. It is is insured because this guarantees that tenants will always get back the money to which they are entitled.
Custodial Scheme
This is where the TDS scheme holds the deposit for the duration of the tenancy. Then the landlord or agent does not pay a fee to the TDS.
What happens to the deposit at the end of the tenancy?
At the end of the tenancy the landlord or tenant can start the repayment process following the end of the tenancy. Once the scheme receives a request for repayment, it will notify the other party of the request and invite them to respond within 30 working days. Within this time, they will have to state whether they agree or disagree. If the other party responds saying that they agree to the repayment, the deposit will be repaid within 10 calendar days. However, if the other party responds saying that they do not agree to the repayment request, they can ask for the dispute to be resolved by the dispute resolution process.
If you’re a landlord or tenant looking for more information, visit the TDS.
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