Tenancy Deposit Scheme Northern IrelandMay 6, 2016
The Tenancy Deposit Scheme was introduced in Northern Ireland on 1 April 2013 under The Tenancy Deposit Schemes Regulations (Northern Ireland) 2012. This requires all landlords who take a deposit for a private tenancy on or after 1 April 2013 to register the deposit with an approved tenancy deposit scheme.
Under Sections 7 & 8 of the Regulations, there are two types of tenancy deposit scheme:
1. Custodial Scheme: This is free to use and open to all landlords and their agents. Landlords using this scheme transfer the deposit and it is then held until the end of the tenancy. At the end of the tenancy the landlord/agent informs the scheme administrator how the deposit is to be paid. If there is a dispute, the deposit will be apportioned in accordance with the decision of an independent adjudicator.
2. Insurance Scheme: The Insurance scheme is where the Landlord holds on to the deposit and pays a fee and any contribution towards insurance to the scheme administrator. The landlord refunds the deposit to the tenant when it is due to be refunded. In the case where there is a dispute, the landlord must hand over the disputed amount to the scheme administrator to safeguard until the dispute is resolved.
Why is The Tenancy Deposit Schemes Legislation being introduced?
– Tenancy deposits will be protected by an independent third party – This will prevent deposits from being unfairly withheld by landlords or letting agents at the end of the tenancy.
– Quick repayment of deposits – Where a landlord and tenant agree about the return of the deposit the deposit must be returned within 5 working days.
– Free access to an independent dispute resolution service – Every approved scheme will provide a free service to resolve disagreements over the return of deposits as an alternative to taking legal action through the courts.
– Provision of information – Landlords must give the tenant key information about the tenancy, the deposit and the scheme that safeguards the deposit. Schemes will also provide information about the protection of deposits and their services to tenants and landlords.
– Sanctions for non compliance – A tenant can report a landlord to the local council if they fail to submit deposits to an approved scheme and/or provide information to the tenant within the specified time limits. Councils will have the power to issue fixed penalties in these cases.
There have been four organisations appointed as Scheme Administrators to operate the Tenancy Deposit Schemes in Northern Ireland. These are TDS Northern Ireland, My Deposits NI, Capita and Letting Protection NI.
The Tenancy Deposit Schemes Regulations (NI) 2012
Any tenancy deposits accepted by a landlord on or after 1 April 2013 must be registered with an approved scheme (see above). Within 14 days of receipt of deposit, the landlord must register it with an approved scheme and, within 28 days of receipt of the deposit, serve prescribed information on the tenant. This prescribed information must include details about the amount of the deposit and about the scheme and where it is being protected.
Should a landlord fail to protect deposits or provide information in accordance with the Regulations the landlord can be subject to a fixed penalty imposed by the district council of three times the deposit or a fine of up to £20,000.
Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before any action is taken. For advice please contact the Property Department at Cleaver Fulton Rankin on 028 9024 3141 or email@example.com