SCHEDULES
SCHEDULE 10Provisions relating to tenancy deposit schemes
Schemes to be custodial schemes or insurance schemes
I11
1
A tenancy deposit scheme must be either—
a
a custodial scheme, or
b
an insurance scheme.
2
A “custodial scheme”is a scheme under which—
a
tenancy deposits in connection with shorthold tenancies are paid to the landlords under the tenancies,
b
amounts representing the deposits are then paid by the landlords into a designated account held by the scheme administrator, and
c
those amounts are kept by the scheme administrator in that account until such time as, in accordance with the scheme, they fall to be paid (wholly or in part) to the landlords or tenants under the tenancies.
3
An “insurance scheme”is a scheme under which—
a
tenancy deposits in connection with shorthold tenancies are paid to the landlords under the tenancies,
b
such deposits are retained by the landlords on the basis that, at the end of the tenancies—
i
such amounts in respect of the deposits as are agreed between the tenants and the landlords will be repaid to the tenants, and
ii
such amounts as the tenants request to be repaid to them and which are not so repaid will, in accordance with directions given by the scheme administrator, be paid into a designated account held by the scheme administrator,
c
amounts paid into that account are kept by the scheme administrator in the account until such time as, in accordance with the scheme, they fall to be paid (wholly or in part) to the landlords or tenants under the tenancies,
d
landlords undertake to reimburse the scheme administrator, in accordance with directions given by him, in respect of any amounts in respect of the deposits paid to the tenants by the scheme administrator (other than amounts paid to the tenants as mentioned in paragraph (c)), and
e
insurance is maintained by the scheme administrator in respect of failures by landlords to comply with such directions.