Delay on tenancy deposit scheme

The Government has announced a six-month delay to the start date for a new mandatory scheme designed to protect the hundreds of millions of pounds of tenants' deposits held by private rented sector landlords or their agents.

The Government has announced a six-month delay to the start date for a new mandatory scheme designed to protect the hundreds of millions of pounds of tenants' deposits held by private rented sector landlords or their agents.

Mentioned as a possibility in this column two months ago, the postponement came as no surprise to many residential property professionals. It puts back to April 2007 the likely start date for the legal requirement for landlords to sign up to a deposit protection scheme.

However, more than 1100 regulated letting offices are already participating in the voluntary Tenancy Deposit Scheme (TDS), which offers speedy and independent arbitration to landlords and tenants over deposit disputes.

The Dispute Service currently oversees the TDS, and scheme chief executive Lawrence Greenberg believes the extra time now available before the introduction of mandatory schemes covering the entire private rented sector can be well spent.


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"We can use it very beneficially to ensure that the positive message about the introduction of these schemes can reach the consumer, particularly those vulnerable through age or inexperience," he said.

A recent survey for The Dispute Service revealed there was a still a long way to go to ensure proper understanding among landlords and tenants of the benefits of deposit protection.

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Encouragingly, it also found a sharp rise in awareness of the TDS, whose disputes system helps minimise the need for lengthy court hearings.

Arguments between landlords and tenants over deposits have been a major bone of contention for decades, but should become much less significant when mandatory protection of deposits becomes law.

The Dispute Service has been running the Tenancy Deposit Scheme for more than two years. Going from strength to strength, it has the backing of all three major professional bodies active in the expanding private rented sector -the Association of Residential Letting Agents, the National Association of Estate Agents and the Royal Institution of Chartered Surveyors.

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