Protecting tenants' deposits is a legal requirement in England. Failing to comply with deposit protection legislation can have serious consequences for landlords.
What is Deposit Protection?
Landlords in England must protect tenants' deposits in a government-approved scheme within 30 days of receiving it. There are three approved schemes:
- Deposit Protection Service (DPS)
- MyDeposits
- Tenancy Deposit Scheme (TDS)
Your Key Obligations:
- Choose a Scheme: You must use one of the approved schemes.
- Protect the Deposit: Place the deposit in the scheme within 30 days.
- Serve "Prescribed Information": You must provide the tenant with specific information about the scheme, how their deposit is protected, and their rights. This must be done within the 30-day timeframe.
Consequences of Non-Compliance:
- Financial Penalties: You could be fined.
- Inability to Serve a Section 21 Notice: If you haven't protected the deposit and served the prescribed information correctly, you cannot use a Section 21 notice to evict the tenant.
- Tenant Claim: The tenant could take you to court and claim compensation.
The Tenancy Agreement's Role:
The tenancy agreement itself doesn't protect the deposit, but it's the foundation for demonstrating compliance.
- Prescribed Information: Your tenancy agreement must include clauses containing the prescribed information about the deposit protection scheme you are using. This includes the scheme's contact details and how the tenant can get their deposit back.
- Legalmaster Guarantee: Legalmaster ensures your AST agreements include the correct, up-to-date prescribed information clauses, so you don't miss this crucial legal requirement.
Protecting your tenant's deposit is more than just good practice; it's the law. Legalmaster helps you create agreements that are compliant with deposit protection legislation, giving you and your tenants peace of mind.
