Since 6th April 2007 it has been a legal requirement  to place a deposit held on behalf of a Tenant with either an insurance based scheme or to register it with one of the Government approved custodial schemes. Most Agents have opted for membership of a scheme such as the one initiated by the Royal Institution of Chartered Surveyors.

All the schemes involve some costs to the holder of the deposit and many landlords of a single property find both the paperwork too onerous and the cost of membership prohibitive to continue to hold deposits on behalf of Tenants.

When a deposit  is received from a Tenant, it is registered with the Tenant's Deposit Scheme withing 14 days of receipt and we are given a unique identity number for each deposit. At the end of the Tenancy a Tenant must now agree to any deductions for dilapidations/rent arrears within 10 days of the end of the Tenancy. If the Tenant does not agree to the deductions proposed the sum in question along with the appropriate paperwork will ultimately be forwarded to the T.D.S. Adjutication by an Independent Case Examiner will then be undertaken within a strict time frame. The T.D.S. sets various time lines which are to be met in the case of a dispute. The T.D.S. also expects that prior to going to the I.C.E. all efforts will have been made to resolve a dispute.

From long before the legislation governing how Deposits should be held and dealt with, we at Robert Bell & Company, were convinced that it would be critical to hold on file a description of the condition of a property at the start of a Tenancy, which should be signed and agreed by the in going Tenant. This condition report would then be the bench mark for the condition of the property.

Preparation of a Condition Report and time "checking in" the Tenant have added to the volume of work for Agents and we have been pleased to reduce this by using the services of Lincs Inventory Services to prepare our client's Condition Reports. Our staff then review the report with the Tenant on the day the property is handed over. We obtain the Tenant's signature confirming their agreement to the report.

When Notice to Quit is issued, or received from a Tenant, we provide Guidelines for Vacating Tenants which can leave no doubt as to what is required when preparing a property for handover.

We have yet to see how the appeals process works. We would warn all landlords that Tenants will more determined to retain their deposit than ever, by insisting that the dispute procedure is initiated. We do anticipate some teething problems and backlogs until the system is established but hope to protect our clients by being prepared !