Introducing the DPS
The Deposit Protection Service (DPS) is one of the three tenancy deposit protection companies set up by the government to protect tenants deposits.
The DPS is the only ‘custodial’ scheme, and is completely free to use. However unlike the paid for ‘insurance based’ schemes, the deposit money has to be physically handed over to the scheme administrators for them to hold until the end of the tenancy.
At that time the money will either be paid out to the tenant or landlord as agreed between them, or the money will be paid out as decided by arbitration. Or, if the parties decide not to use the free arbitration service, as per a decision of the court.
Some reasons why people don’t use the DPS
Many landlords or agents prefer to use the paid for insurance based schemes because:
- They can keep the deposit money in their bank account
- And thus keep any interest earned on it (provided the tenancy agreement allows for this – which most do)
- They can have access to the deposit money during the tenancy, and
- They can pay it back to the tenant immediately rather than having to wait several days for it to be paid out by the DPS
A problem with the insurance based schemes
However there are hidden problems for landlords with the insurance schemes, if the deposit has been protected by an agent. This is because the scheme protects the deposit for the tenant, not for the landlord.
So if the agent does a runner taking all the money with him, the tenant will get paid his deposit back by the scheme (My Deposits or TDS). However the scheme will then claim against the landlord for the money they have paid out.
However if the money is held by the DPS, it is safe and this cannot happen. The landlord is not at risk.
YOUR questions please
As many of you know, I am due to interview Kevin Firth of the DPS next week for my first Landlord Law Podcast. During that interview I will have my own questions, but I would also like to put to him any questions asked by YOU.
For example, have you had a bad experience? What about arbitrations, did they go well for you? Have you had any problems with the paperwork? Do you think the rules are difficult or obstructuve? Are there any things you would like clarified about the system?
Or maybe you have had a brilliant experience and would like to share that with us?
Whatever it is, you can tell us your story or ask your question via the form you will find on this page.
I look forward to reading them.
The deposit protection scheme is another way of the government to make interest and other monies on the tenant,s deposit. Some tenants struggle to obtain a deposit and are prevented from renting because they cannot pay their deposit in instalments.Furthemore the landlords cannot help tenants who get into trouble paying their rent by using the deposit as an extra months rent as it is being held by the government via their companies.Often the tenants problems are only temporary but this may lead to them being evicted prematurely. The landlords cannot evict bad tenants unless 2 months in arrears enabling bad tenants to obtain free accomodation by ripping off one landlord after another which is often fully endorced by the legal system.In other words it is another example of a difficult problem not being solved by simple minded MPs with weakly thoughtout bills and actually being made worse.The scheme may protect the deposit from really unscrupuless landlords but fails to protect landlords from unscrupuless tenants and also can harm fairly good tenants who have a few temporary problems.Furthemore Thatchers government gave away most of the council housing years ago so that tenants are now reliant on the private sector!