DPS: Deposit Protection Scheme

  • Two types:
    • Insurance and custodial:
  • Insurance backed,
    • permits landlords to retain and return deposits.
  • Custodial,
    • requires deposits to be passed to independent custodians to retain until termination of the tenancy.
  • Very strict rules require landlords to
    • provide prescribed information to tenants within 30 days
    • or the deposit to be registered within 30 days under
    • the Localism Act 2011 applicable from 6 April 2012.
  • Landlords accepting deposits will, from 6 April 2012 have tighter rules of compliance or
    • face a minimum fee of 1 times the value of the deposit
    • Or up to three times the value for serious breaches.
  • In addition landlords can be sued for up to 6 years even after the tenancy ends where landlords return deposits but fail to provide
    • the prescribed information and or
    • Register deposits within 30 days.
    • And that’s not all – the section 21 (Accelerated Notice) is not available if rules are breached, so no sympathy from the courts.
    • Effective from 6 April 2012.
  • Deposits taken prior to the protection scheme was introduced are not regulated, i.e. pre 6 April 2007 UNLESS,
    • you have renewed meantime.
  • No renewal requires no re-registering.
    • So a continuing periodic tenancy originating before 2007 is not required to be registered until first renewed and upon each renewal thereafter.

What are your thoughts?

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