Since April 2012, deposits now taken by landlords must be protected in a Government approved Tenancy Deposit Scheme (TDS) within 30 days. If a tenancy is renewed, depending on the tenancy agreement, landlords may need to protect the deposit again.
This is particularly important as failing to do so will result in a Section 21 Notice being deemed invalid by a court.
In order to prevent this from happening, landlords must also provide the tenant with the details of their protected deposit.
At present, there are two types of tenancy deposit protection schemes (TDS) available for landlords:
- Insurance-based schemes, where the landlord pays a fee to protect the deposit and is free to negotiate the amount of the deposit to be returned.
- Custodial schemes, where the landlord hands the deposit to a custodial scheme for the duration of the tenancy, and both the landlord and tenant must apply for its release.
All schemes should offer a free dispute resolution service.