The Government awarded contracts to three companies to run tenancy deposit protection schemes from 6 April 2007:
Computershare Investor Services plc will run the single custodial deposit scheme, with the Chartered Institute of Arbitrators providing the Alternative Dispute Resolution (ADR) service.
Tenancy Deposit Solutions Limited will run an insurance-based scheme, sponsored by the National Landlords Association and administered by Hamilton Fraser Insurance, which will be directed primarily at landlords. The Chartered Institute of Arbitrators will be the principal provider of ADR to the scheme.
Housing Minister Baroness Andrews said tenancy deposit schemes would help put an end to unfairly withheld deposits:
"Tenancy Deposit Protection is a key consumer-protection measure, which will also introduce a simpler way of resolving deposit disputes and help raise standards in the private rented sector. But importantly, under the new schemes, alternative dispute resolution services will be free to use for both landlord and tenant for the first time."
Further details of the schemes will be available from the providers in late January 2007, explaining exactly how their schemes will operate and how landlords can register to join their schemes to protect deposits.
Statutory tenancy deposit schemes will apply to all assured shorthold tenancies, where a deposit is taken after April 6 2007, in England and Wales. They do not apply in Scotland or Northern Ireland.
The private rented sector accounts for some £1.2bn of assured shorthold tenancy deposits currently held in England and Wales.
There are two types of scheme, being:
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).
