April 2007 Tenancy Deposit Protection (Housing Act 2004) With effect from 6th April 2007 all deposits held by landlords or letting agents on newly created assured shorthold tenancies must be covered by one of three protection schemes. This also applies to renewals. There are two insurance backed schemes and one custodial scheme: Tenancy Deposit Solutions Ltd is an insurance backed scheme enabling the landlord to retain the deposit as before. There is a one-off joining fee, a charge for each letting and an annual renewal fee for each property (www.mydeposits.co.uk). The Tenancy Deposit Scheme is an insurance backed scheme run by the Dispute Service and designed primarily for letting agents to enable them to continue holding deposits on behalf of their clients, but landlords may also join the scheme for an annual fee (www.tds.gb.com or 0845 226 7837). The Deposit Protection Service is the only custodial scheme and open to landlords and agents for free (www.depositprotection.com). Whichever scheme you choose the penalties for not complying with the legislation will be severe. You must register the deposit and inform the tenant which scheme you are using within 14 days of taking the deposit. You could lose up to three times the amount of the deposit and the right to terminate the tenancy under s.21 of the Housing Act (1988) if you do not comply. Day Morris will be amending the wording of all tenancy agreements to comply with the new legislation. Where the landlord wishes the agent to hold the deposit Day Morris will use the custodial Deposit Protection Service. If you prefer to make your own arrangements please let us know beforehand so we can prepare the tenancy agreement or renewal agreement accordingly. NB. All schemes are tailored to embrace the possibility of a dispute over the return of the deposit and evidence of condition of the property at the start and end of the tenancy will assist the arbitrator to come to a fair decision. We therefore strongly advise that you employ a professional inventory clerk to prepare a full inventory. Please read the enclosed information sheets carefully before deciding which scheme best suits your requirements, and check their websites or ask Day Morris for more information. You can also contact the Communities and Local Government’s Tenancy Deposit Protection Team on 020 7944 4400 or email tenancy.deposits@communities.gsi.gov.uk