Tenancy Deposit Scheme

Since April 2006 in England and Wales prepayments obtained by landlords have to be secured by a Tenancy Deposit Scheme. Please note that the scheme is only applicable to AST (Assured Shorthold Tenancies), hence in case that you are considering to take in a lodger you won’t have to use the scheme.

The Tenancy Deposit Scheme has been introduced to help both parties the landlord and the tenant in cases where some problems may occur. The Landlord can rely on the deposit to repair any damages to the property, whereas the tenant can rest assured that they will receive their deposit in full and on time.

Presently there are 2 varieties of Tenancy Deposit Scheme being offered and it’s a landlord decision to select the one they want.

Custodial Scheme


This particular plan is cost free and anytime you would like to safeguard a deposit, a sum equal to the deposit is put into the Tenancy Deposit Scheme who is going to keep it for the length of the tenancy. Subsequently right after the tenancy the sum is distributed in accordance with the arrangement, or if both parties are incapable to agree a court decision will help to settle the sum between the landlord and the tenant.

Insured Scheme

Participation in an insured Tenancy Deposit Scheme enables the property owner to keep the prepayment in their personal bank account for the length of the arrangement. However in the event of disagreement, the sum has to be moved to the scheme. Should the tenant is eligible to get their deposit back, and the landlord isn’t able to reimburse the amount, the insured Tenancy Deposit Scheme can pay out the sum to the tenant and look for compensation from the landlord.

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