The government has opened the bidding process to run its proposed tenancy deposit schemes due to come into effect in October 2006.
The schemes which are intended to offer protection for over £740m of assured shorthold tenancy deposits currently held in England and Wales have been advertised in the European Journal.
There are two advertisements, one relating to a single custodial scheme, with the other seeking expressions of interest for one or more insurance-based schemes.
Under the custodial scheme landlords or their agents will be required to pay the deposit to a designated third party. The custodial scheme will also be required to provide a dispute resolution service to deal with disputes between tenants and landlords arising in connection with deposits.
The insurance-based scheme will require landlords or their agents to retain the deposit and pay a premium to a designated third party for them to assure the return of the deposit to the tenant. As with the custodial scheme, the insurance-based scheme will be required to provide a dispute resolution service.
Local Government Minister, Phil Woolas, says either scheme will help to drive up standards in the private rented sector.
“The tenancy deposit schemes will further strengthen other private rented sector provisions in the Housing Act 2004, such as HNO and select licensing, the housing health and safety rating system and empty dwelling management orders,” he adds.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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