New Tenancy Deposit Scheme

For some time the government has been trying to introduce legislation to help protect tenant’s deposits from landlords who retain money unfairly.  In the past there was no central scheme specifically set up to arbitrate a dispute between a tenant and landlord where damage to the property is alleged to have occurred.

Tenancy Deposit Protection (TDP) comes into effect on 6th April 2007 and will affect all new tenancies created after this date.  This tenancy protection will cover all tenancies that fall under the Housing Act 2004 (which is the vast majority of tenancies).

There are just three approved national schemes, briefly these are:

  1. The Deposit Protection Service (DPS) which is a free to join custodial scheme where the deposits are paid into the scheme.  The interest on the funds is used to fund the scheme.  More information from
  2. Tenancy Deposit Solutions Ltd (TDSL) which is an insured scheme.  There will be a fee for landlords to use the scheme, but under it they may be able to continue to hold deposits.  More information from
  3. The Tenancy Deposit Scheme (TDS) is an insurance backed deposit protection and dispute resolution scheme run by the Dispute Service.  This scheme is a little more complex as it was in existence prior to the legislation. Formerly it was only open to letting agents, but it would appear that they are modifying it so that landlords can use it too.  More information at

If you use a letting agent to manage your properties there is a very good chance that they will have already written to you to outline their proposals for dealing with this additional legislation.

Talking to several professional landlords and letting agents the advice seems to be that a properly written tenancy agreement and inventory (including details of existing damage/marks) together with regular inspections of the property will greatly help avoid problems.

[tags]tenancy deposit scheme[/tags]

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