Assuming you are taking a deposit, choose which scheme
It is a very individual thing to decide which scheme, but you have 3 options.
The Deposit Protection Service.
This is by far the most popular service amongst our members who have decided to take a deposit. The Custodial Scheme is free of charge and the landlord / tenant receives interest, but the deposit must be transferred to the scheme administrator who will hold the deposit for the duration of the tenancy. You will need a special clause in your tenancy agreement and a section 213 notice. You must also have a lead tenant agreement in place.
My Deposits (formerly Tenancy Deposit Solutions)
One of the insurance based schemes priced towards private landlords on a pay as you go option, which allows you to retain the deposit for the duration of the tenancy but you must pay to use the scheme. From our calculations, it generally costs more to use the scheme than the interest that you might earn but this does depend on the amounts concerned. (Don't forget a landlord / tenant is still entitled to interest from the custodial scheme above). You will need a special clause in your tenancy agreement, a section 213 notice and a lead tenant agreement. You must remember though, at first it sounds attractive to keep the deposit but if there is a dispute, you must transfer the money to the insurance company who will then hold it, so in that case it is no different to the custodial scheme (but at least the custodial scheme is free!). The costs of the scheme are:
Tenancy Deposit Scheme
The other insurance based option, priced towards letting agents and allows agents to retain deposits on a per office basis which means they pay per office rather than per property. You will need a special tenancy agreement and a section 213 notice. The costs of the scheme are:
You will need to register with the appropriate scheme, of which all three can be done on-line, although the latter option (Tenancy Deposit Scheme) has a rather complicated process and you may have to wait for a decision before they will allow you to be a member!
When you then have a tenant who has paid a deposit, you simply register the tenancy with the appropriate scheme and they will issue a certificate.
