A well-prepared inventory protects landlords and tenants alike, providing an accurate description of the condition and contents of a property at the start and end of a tenancy. The Tenancy Deposit Scheme came into effect on 6th April under the Housing Act 2004. It is now a legal requirement that all landlords or agents that hold a tenants’ deposit under an Assured Shorthold Tenancy will need to participate in a Tenancy Deposit Scheme. This is to help resolve disputes and protect against landlords or agents who withhold deposits without justification.
All of the schemes require a full inventory. If a deposit return ends up in dispute, the judge will look more favorably on an impartial inventory prepared by a third party, such as Inventory Expert, unconnected to either the landlord or the tenant. Inventories prepared by landlords or agents could be viewed as biased and one sided.
There are two types of scheme on offer, both of which offer dispute resolution services:
- Deposit sent away by landlord/agent to Custodial Scheme.
- Landlord/agent informs tenant within 14 days that they are using the Custodial Scheme.
- Deposit is held in scheme until end of tenancy.
- At end of the tenancy if landlord and tenant agree about the amount to be returned, Custodial Scheme return deposit as agreed.
- If landlord and tenant do not agree, scheme holds the amount disputed until dispute resolution service or courts decide what is fair.
- Remainder of deposit (if the whole amount is not disputed) is returned to tenant.
- Deposit held by landlord/agent who pays a premium to an insurance company.
- Landlord/agent informs tenant within 14 days who their insurance scheme is with.
- Tenant can verify that their bond is protected by contacting insurer directly.
- At end of the tenancy, if landlord and tenant agree about amount to be returned, landlord returns amount agreed directly to tenant within 10 days.
- If landlord and tenant do not agree, landlord sends disputed amount to insurance scheme for safekeeping until dispute resolution service or courts decide what is fair.
- Remainder of deposit (if whole amount is not disputed) is returned by landlord to tenant within 10 days.
In both schemes, dispute resolution is evidence based – no-one will physically inspect the property. It is therefore essential to have detailed inventories alongside check-in and check-out reports. Without this evidence, landlords stand little chance of winning the dispute.
If a deposit is not protected and the tenant is not informed of which scheme it is protected under, there are consequences for the landlord, including hefty fines. Tenants, landlords and agencies alike should protect themselves and their money by asking for an independent inventory to be carried out. Contact us for a comprehensive quote.