One of the key elements of the process of renting a property is the deposit, and this is something that you will want to be protected, probably by the right deposit protection scheme, irrespective of whether you are the landlord, agency or tenant.
If you are a tenant, then as the person who is actually paying the deposit, it goes without saying that you will want this important initial investment to be protected.
Private landlords and letting agencies, meanwhile, are legally compelled to use a government-authorised tenancy deposit protection scheme to safeguard all deposits that they take for assured shorthold tenancies (ASTs) in England and Wales. That is the case under the Housing Act 2004 – as amended by S.184 of the Localism Act 2011.
That is not to suggest that either party necessarily relishes this responsibility, with landlords often associating the deposit protection process with a great amount of inconvenience and paperwork. Letting agencies, meanwhile, are likely to appreciate a deposit protection scheme from a company that is willing to work closely with them to streamline the whole process, saving them more than a few headaches, too.
This brings us to a clear question… what qualities should you look for in a company that offers a deposit protection scheme? Which one is likely to be the most reliable, capable and trustworthy?
What to look for in a company offering a deposit protection scheme
Such is the importance of something like a deposit protection scheme that you will need to ensure that the company that provides you with one is credible and trustworthy. You may therefore gravitate to a company that already has a strong reputation for insurance and property services and professional support solutions.
At the time of typing, there are only three tenancy deposit protection (TDP) schemes that landlords are able to place a deposit in, for homes rented on an assured shorthold tenancy in England and Wales starting after 6 April 2007. Those schemes are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme. However, there are also two other schemes that will become available from 1 April 2013, and for which you can register now: Deposit Protection Service Insured and Capita Tenancy Deposit Protection.
The beauty of these government-backed schemes for tenants is that as long as they meet the terms of their tenancy agreement, avoid damaging the property and pay their rent and bills, they are assured of getting their money back.
What else do you need to know about tenancy deposit protection?
When the tenancy comes to an end, as long as there is agreement between the landlord and tenant as to how much deposit the latter will receive back, the return of the money must take place within 10 days of the tenancy ending. In the event of a dispute on the matter, the deposit protection scheme keeps the deposit safe until the issue is resolved.
A deposit protection scheme must be used by the landlord even if the deposit has been paid by someone other than the tenant, such as their parents or a rent deposit scheme.
