The Deposit Protection Service

The Deposit Protection Service

What is it?

As part of the Housing Act 2004 the Government introduced tenancy deposit protection for all assured shorthold tenancies (ASTs) in England and Wales where a deposit is taken. From April 6th 2007, all deposits paid under an AST should have been protected within 14 calendar days of receipt by the landlord. From 6th April 2012, deposits for all assured shorthold tenancies (ASTs) in England and Wales must now be protected within 30 calendar days of receipt by the landlord, this change is as a result of the Localism Bill 2011.
The legislation aims to ensure that tenants who have paid a deposit to a landlord or letting agent and are entitled to receive all or part of it back at the end of that tenancy, actually get it.

Who is affected?

The legislation covers virtually all new AST contracts through which private landlords let property in England and Wales.
However, the following will not need to be registered with a tenancy deposit protection scheme:
> Resident landlords (those living in the property).
> Landlords of tenancies with rent of over £100,000 a year.
> Company lets.
> Student accommodation let directly by universities or colleges.
Deposits taken before 6 April 2007 do not need to be protected by a scheme such as The DPS. However, as an existing tenancy is renewed and a landlord agrees a new fixed-term tenancy, the initial deposit taken must then be lodged with a tenancy deposit protection scheme.

Why is legislation needed?

The return of a deposit at the end of a tenancy is by no means guaranteed. For example, in 2008/9:
> 70% were returned in full.
> 17% were returned in part.
> 13% were not returned at all.
The reasons given by landlords for withholding some or all of a deposit were:
> damage to the property (23%)
> cleaning the property (38%)
> unpaid rent or bills (8%)
> other reasons (28%)
Nearly one in five (17%) of tenants who had some or all of their deposit withheld felt that it had been withheld unjustifiably. The new tenancy deposit protection schemes will ensure all landlords safeguard the deposits they take, which is in every landlord and tenant’s interests.