Q. Who runs the tenancy deposit protection schemes?
A. The government has awarded contracts to three companies to run tenancy deposit protection schemes;
- The Deposit Protection Service (The DPS)
The DPS is the only custodial deposit protection scheme, is free to use and open to all Landlords and Letting Agents. The service is funded entirely from the interest earned from deposits held. Landlords and Letting Agents will be able to register and make transactions online. Paper forms will also be available should internet access be an issue. The scheme will be supported by a dedicated call centre and an independent dispute resolution service.
- Mydeposits
Mydeposits is a partnership between the National Landlords Association and Hamilton Fraser Insurance. This insurance-based tenancy deposit protection scheme enables landlords, either directly or through agents, to hold deposits. Letting agents can also join the scheme.
- The Tenancy Deposit Scheme (TDS)
TDS is an insurance-backed deposit protection and dispute resolution scheme run by The Dispute Service that builds on a scheme established in 2003 to provide dispute resolution and complaints handling for the lettings industry. The new scheme enables letting agents and landlords to hold deposits.
The need for protecting deposits was recognized by the government due to the amount of the unscrupulous Landlords that were operating in the Lettings sector, it also helps to deal with disputes in a professional manor. Independent adjudication takes the heat out of disputes that can be over very small amounts. Adjudication also dramatically underlines the advantage of proper inventories that have been checked at both the beginning and end of every tenancy, especially where larger sums of money may be involved.