How Agents can transfer a tenancy deposit safely

Is your landlord taking back management of their property? Or are they changing letting agent?

If so, you may need to transfer deposit money which you protect. So can it be done? The answer is yes, and you are particularly flexible when using an insured scheme such as TDS – but you must take certain precautions. Otherwise you, your tenants, and your landlords may be open to risk. So how can it be done?

Some key points to remember when transferring deposit money which you protect:

1. Before transferring deposit money, request written confirmation from the landlord or new agent of where the deposit is going to be re-protected.
2. If it is going to be protected by an insured scheme, give an undertaking that you will only transfer the money on receipt of proof that the deposit is re-protected.
3. If it is going to a custodial scheme, only pay the deposit to the scheme directly.
4. If the existing tenancy agreement is continuing, create an addendum to reflect the new arrangement.
5. Once you have transferred the deposit write to all parties confirming the new arrangement.
6. End protection of the deposit in your TDS account by selecting ‘transfer’.

From an agent’s point of view when a deposit holder, the key requirement in any movement of the money is that the agent is accountable to both parties for its safety. Therefore the agent must take steps to ensure that the deposit is properly protected at all times and that all parties are kept informed.

The tenant normally has no say in which scheme will protect the deposit as this is the deposit holders’ legal responsibility.

Remember that we continue protecting the deposit after the transfer for 3 months or until it is protected in a new scheme – whichever date is sooner. To avoid any risk don’t release any deposit money which you protect (and should be protected) unless you are certain its new home is a protected one.

If you are a letting agent, or a landlord with a large portfolio and wish to transfer deposit protection to the Tenancy Deposit Scheme we are able to assist with the practicalities – we won’t leave you alone to the administration. Contact us for more information – deposit@tenancydepositscheme.com