TDS has become the first Tenancy Deposit Protection Scheme to introduce a range of free, online tools to help landlords and agents comply with incoming Deposit Cap legislation.
As of 1 June 2019, landlords and letting agents in England will only be legally allowed to take the equivalent of five weeks’ rent as a tenancy deposit on annual rents below £50,000, and the equivalent of six weeks’ rent if the annual rent is £50,000 or more on any new or renewed tenancies. Any landlords or letting agents in England found to be in breach of the new legislation could face a fine of up to £5,000.
At this time, the new regulations apply to new and renewed tenancies beginning on and following 1 June 2019. Tenancies will only fall under the cap if they are renewed for a new fixed term. Tenancies that become contractual or statutory periodic tenancies will not be affected.
TDS’ suite of information and tools includes an online Deposit Cap Calculator. As well as being free to use, the calculator is also available for letting agents to embed in their own websites.
A new feature for landlords and letting agents is the TDS Custodial Deposit Cap Solution. This is a new ‘Edit deposit amount’ function where a landlord or letting agent can increase or decrease the deposit amount if they need to repay a deposit above the cap after the 1st June 2019. Where a new fixed term tenancy is created the landlord/agent can simply change the deposit amount down to the new five or six week level and TDS will sort out the repayments back to the led tenant.
When the deposit has been reduced, a new Deposit Protection Certificate in the new amount will be available in the member’s online account. As with the TDS Insured scheme no new Prescribed Information has to be issued in these circumstances.
The not-for-profit deposit protection scheme has also created a dedicated Deposit Cap Resource Centre, hosting a suite of information on the incoming legislative changes. DepositCap.com is a one-stop-shop for all the information landlords, letting agents and tenants need to fully prepare them for the introduction of the Act.
The Resource Centre includes the Deposit Cap Calculator, a graphical timeline, example scenarios, guides, information and other tools to help provide clarity on how the Deposit Cap will affect letting agents and landlords and how to reduce the deposit they hold whether they use TDS’ Insured or Custodial scheme.
Rebecca Johnston, managing director of TDS Custodial, said: “Despite the Tenant Fees Act coming into force in 60 days, there is still confusion in the market about how, exactly, it will affect people.
“One of the most common issues we’re seeing among landlords and letting agents is how the five weeks’ rent could be miscalculated, meaning some could inadvertently be caught on the wrong side of the law come June. It’s not simply a case of one and a quarter months’ rent. That’s why we’ve created our Deposit Cap Calculator to take the confusion out of the process.
“It’s not a stand-alone tool though. Our Resource Centre and automated deposit reduction solution are designed to make the transition to the new legislative framework as straightforward and pain-free as possible for our letting agent and landlord members.”
