As From 6th April 2007 all Landlords and Letting Agents taking deposits for Assured Shorthold Tenancies (AST’s) in England & Wales will be required to join a government accredited deposit protection Scheme. This will safeguard all the deposits landlords and agents take. This legislation forms part of the Housing Act 2004.
Types of Scheme.
There are two types of scheme – A Single Custodial Scheme run by the Deposit Protection Service and at the moment two insurance based schemes run by a) The Dispute Service and b) My Deposit. The difference between a custodial scheme and an insurance based scheme is straight forward.
With the Custodial Scheme it is free for Landlrods to register, but they do not hold on to the deposit themselves, they hand it over to the administrators. With the Insurance Based Schemes, after registration and the payment of the relevant fee, Landlrods may hold on to all deposit money’s taken.
The Custodial scheme
The Single custodial scheme. Under this Scheme deposits will be held centrally and are lodged through Computershare Investor Services Plc which has been approved by the DCLG to operate the Scheme.
The Insurance Based scheme
Tenant Application Form