Deposit Protection Scheme (DPS)
- Two types:
- Insurance and custodial:
- Insurance backed,
- permits landlords to retain and return deposits.
- Custodial,
- requires deposits to be passed to independent custodians to retain until termination of the tenancy.
- Very strict rules require landlords to
- provide prescribed information to tenants within 30 days
- or the deposit to be registered within 30 days under
- the Localism Act 2011 applicable from 6 April 2012.
- Landlords accepting deposits will, from 6 April 2012 have tighter rules of compliance or
- face a minimum fee of 1 times the value of the deposit
- Or up to three times the value for serious breaches.
- In addition landlords can be sued for up to 6 years even after the tenancy ends where landlords return deposits but fail to provide
- the prescribed information and or
- Register deposits within 30 days.
- And that's not all - the section 21 (Accelerated Notice) is not available if rules are breached, so no sympathy from the courts.
- Effective from 6 April 2012.
- Deposits taken prior to the protection scheme was introduced are not regulated, i.e. pre 6 April 2007 UNLESS,
- you have renewed meantime.
- No renewal requires no re-registering.
- So a continuing periodic tenancy originating before 2007 is not required to be registered until first renewed and upon each renewal thereafter.
Published: 5 November 2013 Last Updated: 17 November 2021