As a landlord or letting agent, ensuring your tenant’s deposit is secured through a reliable deposit protection scheme is not just a matter of good practice but a legal obligation.
In this article, we’ll explore the main types of protection schemes and help you decide which is best suited to your needs, with a special emphasis on the benefits offered by us, the Tenancy Deposit Scheme.
What is a deposit protection scheme?
Since 2007, it has been mandatory for landlords and agents to use an approved scheme to protect tenants’ deposits within 30 days of receiving them. Failure to do so can lead to financial penalties and legal obstacles. More details on compliance can be found on the UK government website here.
A deposit protection scheme is designed to safeguard tenants’ deposits and ensure that landlords and letting agents handle them fairly. In England and Wales, there are three government-approved schemes: the Tenancy Deposit Scheme, MyDeposits, and the Deposit Protection Service. All three offer both insured and custodial options.
Insured vs Custodial, what’s the difference?
Before deciding which scheme to use, let’s take a look at the two main types available:
Insured deposit protection scheme
With an insured scheme, the landlord or agent holds the deposit during the tenancy but pays a fee to insure it. This provides security for everyone involved and ensures that the deposit will be protected even if there is a dispute.
Custodial deposit protection scheme
In this option, the deposit is transferred to the scheme, which holds onto it until the end of the tenancy. There are typically no fees for using a custodial scheme, making it an appealing choice for those who prefer to avoid annual charges.
For a detailed view of each scheme’s difference, read our blog.
Why choose the Tenancy Deposit Scheme?
While all government-approved schemes meet the basic requirement of protecting tenants’ deposits, the Tenancy Deposit Scheme stands out for its extensive benefits and user-centric approach. Here’s why:
- Trusted: TDS is the longest-running deposit protection schemes in the UK, backed by the NRLA, RICS and Propertymark. We’re the only Government-backed, British-owned scheme.
- Flexible: TDS offers both free deposit protection with our custodial scheme, and the best-value deposit protection in our insured scheme. Landlords and agents can choose the option that best fits, or you can use both schemes simultaneously if that suits your needs!
- Agent+ and Landlord+: TDS offers agents and landlords access to exclusive offers such as discounts on emergency repairs, inventory reporting, banking, insurance and more.
- Early dispute resolution: TDS offer a technology-driven portal to streamline self-resolution helping to resolve disputes quickly and effectively. Agents, landlords, and tenants can negotiate directly, proposing and adjusting deductions or agreeing on terms, without involving TDS unless the dispute becomes formal. The portal tracks case progress and includes a “Chat now” feature for confidential discussions and file sharing.
- Free dispute resolution: TDS is known for its impartial and free alternative dispute resolution (ADR) service, which helps resolve any disagreements over deposit deductions quickly and fairly. This service saves landlords and agents from potentially costly court disputes.
- Support and guidance: TDS provides a wealth of resources, including guides, templates FAQs, and expert advice in our help centre.
Why the Tenancy Deposit Scheme is the best choice
The Tenancy Deposit Scheme is often the preferred choice for landlords and letting agents who value award-winning customer service, reliability, and support. TDS’s dual offering of insured and custodial schemes provides flexibility, and our focus on clear communication and dispute resolution ensures that landlords and tenants alike have a positive experience.
Choosing the right deposit protection scheme is essential for complying with UK regulations and maintaining trust between landlords, agents, and tenants. The Tenancy Deposit Scheme stands out for its user-friendly approach, experienced service, and commitment to supporting landlords and agents with expert advice and resources.
For landlords and agents who want to safeguard their tenants’ deposits effectively while benefiting from a scheme that prioritises service and support, the Tenancy Deposit Scheme is the best choice. Visit the TDS website to learn more!
About TDS
The Tenancy Deposit Scheme is part of The Dispute Service (TDS), the largest tenancy deposit protection (by value) and resolution service provider in the UK making life easier for tens of thousands of agents, landlords, developers, and millions of tenants and homebuyers. Our award-winning customer service is highly rated on both Trustpilot and Google, and we’re backed by the NRLA. We offer free deposit protection in our Custodial scheme, and the lowest rates for landlords in our Insured scheme.
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