THOUSANDS of tenants across England and Wales will be over £2 million pounds better off, thanks to new legislation ensuring the protection of tenancy deposit.
Since April 6 last year, every landlord and letting agent in England has been required to adopt either a custodial or insurance-based deposit protection method for any new or updated assured shorthold tenancy (AST) agreement.
This has meant that tenants have received interest the interest accumulated on their deposits, which rarely happened prior to the legislation.
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According to the Deposit Protection Service (DPS) -the only custodial scheme approved by the government- tenants and landlords will be on the receiving end of £2.5 million in interest as the tenancies currently protected by the service come to an end.
The DPS works by holding a tenant's deposit, free of charge, for the term of the tenancy agreement.
At the end of the rental period, the deposit, and a portion of the interest it has accumulated, is paid back to whoever is entitled to it - tenant or landlord, depending on the condition of the property and the terms of the rental agreement.
The remaining interest is used to fund the service.
Out of the total £2.5 million in accumulated deposit interest, the DPS has already returned payments of more than £200,000 following the end of tenancies during the past 12 months.
For more information visit www.depositprotection.com.
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