Quick Guide to Tenancy Deposit Protection for New Landlords

As the private rental market continues its growth, a boom in buy-to-let is predicted. This means that new landlords and entrepreneurs are joining the fray to capitalize on this growing demand. New landlords may not fully understand the legal requirements for tenancy deposit protection. Private Landlords must deposit the tenant's deposit in tenancy protection (TDP) If you rent your house on an AST scheme Secured short-term tenancy . This was after the 6 April 2007.

If your property is located in England or Wales, you can apply any of these schemes:

• Deposit Protection Services
• MyDeposits
• Tenancy Deposit Scheme

Notice: Separate TDP schemes exist in Scotland, Northern Ireland.

In all TDP schemes, There are 2 choices available for you in these schemes:

1. The scheme holds the deposit free of charge - also known as a "custodial" scheme
2. The agent or you hold the deposit, and you pay the scheme for insurance - also known as an "insured" scheme

It's not enough to choose an insured scheme (where you deposit the money and the scheme protects it at a low cost) or a custodial scheme (where the deposit is held by the scheme for no charge).
You need to be aware that there are important timings, documents, and processes that you must follow in order not to fall foul of the law.
This will not only help you avoid financial penalties, but it will also help to prevent any deposit disputes at the termination of your tenancy.

Here's a quick guide on tenancy deposit protection using the government-approved scheme

• Protect your deposit within the timeframe

Deposits for assured shorthold tenants (ASTs), must be protected by a government-approved scheme within 30 days of receipt. Important to remember that a holding deposit does not qualify as a tenancy deposit under section 212 of the Housing Act 2004. It is not required to be protected.

###• Deliver your Prescribed Information promptly (but not too soon)
Within 30 days after receiving the deposit, the landlord or their agent must provide the required information to the tenant (or the relevant person') in the form of the scheme leaflet.
Prescribed Information should not be served before the actual receipt of the deposit. This is even if you want to be efficient, the time limit starts counting from the day a full or part of the deposit is paid. It is best to keep a record of when documents were served so that you can prove they were received within the time limit.

• Create detailed inventory reports to gather evidence

An adjudicator will review evidence from both sides regarding the property's changing condition if there is a dispute at the termination of tenancy. It can be difficult for an adjudicator to justify a deduction from the deposit without a detailed inventory and detailed check-in and check-out reports. They can't compare the changes from start to finish of the tenancy. To ensure that you collect the correct level of detail at every stage of the tenancy, use an app such as the RentOnCloud.

• Conform to the Tenant Fees Act

Tenant Fees Act bans landlords from charging excessive deposits and fees. You should therefore verify your deposit amount against the Deposit Cap regulation, and check for permissible tenant fees. You may be surprised at the differences in fees across the UK. Few guide
Admin fees, negotiation fees, invoice charges, Saturday move-in fees, and reference fees are prohibited under the Act of England and Wales. Similarly, check-in and check-out are prohibited. Although interest can be charged on late payment of Rent, a late payment add-on fee is prohibited under the act.

• Keep a log of all communications during the tenure

It is often easier to communicate than to litigate. Tenants should inform you of any issues during their tenancy. You should respond quickly and take action. Keep a log of all actions. It is important to keep tenants' contact information up-to-date in order to make communication easier in the event of a dispute.

• Use the correct end-of-tenancy procedure for the scheme

At end, your fixed-term tenancy is under the Insured program. To end the protection of your deposit, log in to your TDP scheme account after the tenancy has ended without any dispute.
TDP Custodial scheme recommends that you speak with the tenant first about any deductions from the deposit. Then, enter a repayment request online.

• Learn about the deposit dispute procedure

Only the information provided by an adjudicator is sufficient to enable them to make a decision. They won't contact the parties to obtain additional information or support evidence. Adjudicators can only resolve disputes if both landlord and tenant agree. An adjudicator must know the details of the case and the amount being claimed before they can consider it. This information is found in the Dispute Application as well as the Dispute Response sent by the landlord and tenant to TDS. These documents should be completed correctly so that the adjudicator does not have any doubts about the claim's purpose.

• What evidence are you allowed to use in a dispute?

The scheme can resolve any disagreements about how the deposit should be divided at the termination of the tenancy. Based on the evidence, an impartial adjudicator will determine how the deposit should be split.
You must gather all evidence that you would like the adjudicator to consider to support your claim in a dispute. Include the check-in inventory, schedule of condition reports and check-out reports. Attach a schedule detailing what was paid and what wasn't, along with the dates when rent was due. These documents will be required to prove that the tenant is responsible for any damage to property or rent arrears.
The adjudicator will need to see details of any previous communications, receipts from work done (or quotes for intending work), and photos that are dated. You can easily upload all evidence using the document, invoices, messenger, communication log function with RentOncloud cloud application.