Since the 6th April 2007, all tenant's deposits up to the value of £25,000 have been governed within the guidelines of the Tenants Deposit Scheme, introduced by the government with the aim of providing a system which is fair to both tenants and landlords in respect of returning deposits to tenants when and if this is deemed to be reasonable, and to create clear agreements which clarify the exact condition of the property to be rented out.

In the past, there have been serious issues whereby some unscrupulous landlords and tenants have abused deposits. In addition the resolution of such disputes has been wholly unsatisfactory. There are currently two schemes in operation, both of which offer a free dispute resolution service, namely the Insurance and Custodial. The Insurance scheme states that the tenant pays the deposit straight to the landlord who then pays a premium to the insurance company, whereas with the Custodial scheme, the deposit is paid straight into the scheme by either the landlord or other agent.

Please go here for more information on the Tenants Deposits scheme

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