How does Tenancy Deposit Protection work?
When a landlord takes any money for deposits for an assured shorthold tenancy, the landlord must safeguard the deposit using a tenancy deposit scheme. There are three tenancy deposit protection schemes: one custodial scheme and two insurance-based schemes. • The Deposit Protection Service (DPS), a custodial scheme, is free to use and is open to all landlords or letting agents. Under this scheme, the landlord places the deposit into a separately held account managed by the scheme. The service is funded entirely from the interest earned from held deposits. For more information, visit http://www.depositprotection.com or call 0870 707 1707. • Tenancy Deposit Solutions Ltd (TDSL), an insurance-based scheme, is sponsored by the National Landlord Association and administered by Hamilton Fraser Insurance Services. It is open to all landlords and letting agents. Under this scheme, the landlord retains the deposit but pays a fee to insure the scheme against any misappropriation of the deposit. F
