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Tenancy Deposit Scheme
As of 6th April 2007 landlords and agents will no longer be able to hold bonds on a property as they currently do. The bonds must be held in accordance with one of 3 government approved schemes
Scheme 1: Custodial Scheme - the bond money is paid in full to a scheme. The scheme will release the funds at the end of the tenancy once an agreement has been made between the tenant and landlord/agent – if it is disputed both parties will provide evidence and the custodial scheme will investigate and allocate the bond as it sees fit.
Scheme 2: Landlord Insurance Scheme - landlord can pay a set fee to enable them to keep the bonds but will have to tell the scheme what is held and should tenants dispute the bond the disputed amount will then be paid to the scheme and will investigate and allocate it as it sees fit.
For all schemes bond monies must be paid into or the scheme informed of bonds held within 14 days of the bond being paid by the tenants – failure to so will result in heavy penalties. Bonds will have to be returned to tenants within 10 days- failure to stick within these time frames will result in penalties.
What are the penalties?
1. The landlord/agent will be refused the right to serve a section 21 on a tenant – i.e. if a tenant stays on past their tenancy the landlord won’t be able to take them to court to get them out. 2. The landlord will be fined (or agent if managed) 3 x bond amount.
How will this affect CPS Homes and our landlords?
All managed properties will be sorted by CPS Homes so the landlord will have no need to do anything – we will do it for them. Let only landlords will no longer be able to have the bonds paid to them unless they can prove they have membership to the landlord insurance scheme – if they don’t the monies will automatically be paid into the custodial scheme and they will be passed the details ready for the bond return.
If you have any queries, give our accounts team a ring on 029 2045 4555.