The UK's Department for Communities and Local Government (DCLG) announced on 22 November 2006 that The Dispute Service Limited has won a contract to offer an insurance-based tenancy deposit protection (TDP) scheme for England and Wales.
On behalf of its members, RICS is a member of the joint industry insurance-based scheme (with ARLA and NAEA), the Tenancy Deposit Scheme for Regulated Agents which is run by the The Dispute Service Limited. RICS is a shareholder of The Dispute Service Limited but it runs at arm's length from RICS.
RICS members are eligible to join the scheme if they have in place Professional Indemnity Insurance (PII) and contribute to RICS Clients' Money Protection Scheme (CMPS).
Background
The 2004 Housing Act requires those holding tenants' deposits to join a scheme that protects the deposits held as well as offer a remedy should a dispute arise concerning the deposit.
The legislation will come into force in April 2007 and will affect members who are managing agents involved in the collection and retention of deposits made by tenants.
There are two types of schemes that a deposit holder can join:
- a custodial scheme where the deposit is held a central fund;
- an insurance-based scheme where the holder is able to retain the money but it is protected by insurance (clients' money protecton).
Both schemes must offer dispute resolution.
The custodial scheme will be run by Computershare Investor Services.
RICS members who hold tenancy deposits are holding clients' money under RICS' rules.
Therefore, they should already by covered by the CMPS. The TDP scheme's additional element is a dispute resolution mechanism.
Advice for RICS members
For further information about joining the scheme run by The Dispute Service Limited, go to their website (see External Websites panel).
Keep an eye on RICS.org for updates as and when definitive information is received from DCLG on when the legislation comes into force
RICS is preparing guidance to assist members who:
- hold tenancy deposits;
- are agents of landlords who hold tenancy deposits;
- wish to join a custodial scheme
- guide for members to give to tenants
- guide for members to give to affected landlord clients
We will publish full details of all schemes and how to access them as soon as we receive them.
For general TDS queries
Patricia Monahan
T +44 (0)20 7695 1673
E rhye@rics.org
For CMPS queries relating to the scheme
Zena Southwell
T +44 (0)20 7695 1643
E zsouthwell@rics.org
