Introduction to deposits
If you have an assured shorthold housing contract, and you pay a deposit to your landlord which is intended to cover the cost of damage to the property or other breaches of contract, your deposit must be protected by a government authorised tenancy deposit protection scheme.
Nearly all housing contracts in the private rented sector in Sheffield are assured shorthold contracts so most deposits paid by students should be protected. There are some exceptions. For example, resident landlords, and private landlords who use a different type of contract called an assured contract, do not have to protect deposits. The University is not a private landlord so it also does not have to protect deposits.
There are currently five authorised schemes. The organisations running the schemes are -
Four of the schemes are insurance-based schemes. With this type of scheme, the deposit remains with the landlord during the tenancy but the landlord pays a fee to the scheme to cover the cost of protecting the deposit. At the end of the tenancy, if the landlord and tenant agree on how much of the deposit should be refunded to the tenant, the landlord simply refunds this amount. If the landlord and tenant cannot agree, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.
The remaining scheme, one of the schemes run by The Deposit Protection Service, is a custodial scheme. With this scheme, the landlord transfers the full amount of the deposit to the scheme. The landlord does not have to pay a fee to the scheme because the scheme is funded by the interest it earns on the deposits it holds. At the end of the tenancy, if the landlord and tenant agree on how much of the deposit should be refunded to the tenant, the scheme will refund this amount. If the landlord and tenant cannot agree, the scheme will keep the deposit until the dispute is resolved.
Top tip
If your deposit is protected by one of the insurance-based schemes, the protection will end 90 days after the end of your tenancy unless a dispute is lodged within this time.
With all the schemes, the landlord is required by law to protect the deposit within 30 days of receiving it. There are also strict rules on the information that must be given to the tenant. For more information on what should happen when you pay a deposit, click here.
Last Updated: 09/07/2013 | Disclaimer




