Tenants' cash protected under new laws

Tenants' deposits will get protected by new laws coming into force in April of this year in a move set to give renters more rights and security.

Under the new law landlords in England and Wales will have to sign up to Assured Shorthold Tenancy (AST) schemes that safeguard any deposit paid by a tenant from April 6th 2007 onwards.

Once tenants pay their deposit to landlords the AST scheme administrator gets notified and the cash is protected.

If landlords then want to withhold the deposit, they are required by law to give details to the tenant about the scheme being used within 14 days.

And if there is a dispute at the end of the tenancy, access to an evidence-based alternative dispute resolution procedure will be offered.

Failure to sign up to an AST once the law comes into effect could mean big costs for landlords, with fines of up to three month's rent.

"The repercussions of non-compliance are severe. We strongly urge landlords to prepare themselves by selecting a suitable scheme in advance of April 6th," said David Salusbury, chairman of the National Landlords Association.

He added: "Tenants also have a vested interest in familiarising themselves with the new procedures and ensuring that their deposit money is protected when they sign a new tenancy. They must know their rights and insist that the landlord complies."

Government statistics show one in eight households are privately rented and 30 per cent of the time deposits are either only returned in part or not at all.

Though in most cases tenants say the deposit had been withheld justifiably, as many as 17 per cent of renters say their cash was kept unfairly by landlords.