The Tenancy Deposit Protection Scheme

ARLA, December 2006

The Dispute Service wins contract

How this will work …

Statutory tenancy deposit schemes will apply to all assured shorthold tenancies, where a deposit is taken after April 7 2007, in England and Wales. They do not apply in Scotland or Northern Ireland.

There are two types of scheme: a single custodial schemes (where deposits will be paid into and held in a separate account managed by the scheme); and one or more insurance-based schemes where the landlord or agent will hold the deposit and any failure on his / her part to repay it to the tenant will be covered by the scheme’s insurance arrangements.

The custodial scheme run by Computershare Investor Services will be free to use for tenants and landlords. The scheme will be funded by the surplus from interest generated on the pool of deposits, with interest also being paid to tenants.

The two insurance-based schemes, run by the Dispute Service Ltd and the National Landlords Association, will be funded through a fee paid by landlords or agents (the fee level should be known in early 2007). The service will be free to tenants.

All three schemes will offer alternative dispute resolution services which will be free to use (for both landlord and tenant).

About the contractors …

The Dispute Service
The Dispute Service Ltd was established in 2003 to provide dispute resolution and complaints handling services to the lettings industry. It is backed by the three professional bodies that are active in the private rented sector: the Association of Residential Letting Agents and the Royal Institution of Chartered Surveyors.

It handles complaints for ARLA and NAEA as well as currently running the voluntary Tenancy Deposit Scheme for the Regulated Agents for some 2,000 self-regulated lettings offices. For more information visit: tds.gb.com. Computershare (ASX:CPU) provides share registration, employee equity plans, proxy solicitation and other specialised financial and communication services.

Computershare has administered a custodial tenancy deposit scheme in the Australian State of Victoria for the past eight years. For more information visit computershare.com

The National Landlords Association is the UK’s largest private rented sector landlord association. It protects and promotes the interest of private residential landlords and represents their views to government, local authorities and the media. Hamilton Fraser Insurance is a trading name of HFIS plc, an insurance broker that is authorised and regulated by the Financial Services Authority. For more information visit: mydeposits.co.uk

Further details of the schemes will be available from the providers in late January 2007, explaining exactly how their schemes will operate.

Manning Stainton, being members of ARLA, The National Association of Estate Agents and also abiding by the rules of Royal Institution of Chartered Surveyors will be authorised to hold tenants’ deposits and will not need to see them held in a separate account managed by the Tenant Deposit Protection Scheme.