From 6 th April 2007, landlords who take deposits from their tenants under an assured shorthold tenancy agreement must belong to a tenancy deposit protection scheme.

If landlords don’t adhere, they risk being taken to court and fined, says the National Association of Estate Agents. The NAEA is advising any landlords or letting agents who have not already joined one of the three government approved schemes to act now. The Dispute Service, the Deposit Protection Service and Tenancy Deposit Solutions Ltd are all running either insurance backed or custodial schemes for landlords and agents to join.

Jan Bartlett, lettings expert at the NAEA, said: “ A number of organisations are claiming to be able to help landlords and lettings agents ‘get round’ the new legislation. It is worth bearing in mind, however, that the new rules will be strictly enforced so it may not be worth the consequences if you get caught out. The only other option is to not take a deposit from tenants at all. However, this is done at considerable risk and is not an advisable course of action.”