DPS Custodial Scheme

The Deposit Protection Service (The DPS) is a tenancy deposit protection scheme accredited by the Government. The DPS is run by Computershare Investor Services Plc, which has administered a deposit scheme in the Australian state of Victoria for over 20 years.

In addition to the Custodial Scheme the DPS introduced in April 2013 a Deposit Insurance Scheme more information click here

How does The DPS Custodial Scheme work?

  • The tenant pays the landlord or letting agent their deposit. The landlord/agent pays the deposit into The DPS within 14 days of receiving it.
  • Following receipt of the deposit, The DPS will provide confirmation and details of the protection scheme being used to both the landlord/agent and the tenant.
  • At the end of the tenancy, the landlord/agent and the tenant agree repayment of the deposit and inform the scheme administrators. The deposit repayment, divided accordingly and including any interest accrued, will be initiated to each party within 10 days.
  • If there is a dispute, The DPS administrators return any undisputed amount (plus interest) to the relevant party, but hold the disputed portion until the ADR service or the courts decide what is fair.

Example 1 - Where Landlord and tenant agree

  1. A tenant pays a deposit of £700. (cannot be no more than 5 weeks rent)
  2. At the end of the tenancy, the landlord says he wishes to keep £50 to pay for cleaning the flat. (Although cleaning fees no longer permitted as a condition of a Tenancy Agreement, but tenant could agree the deduction)
  3. The tenant agrees. 
  4. £650 is returned to the tenant and £50 is returned to the landlord. [no interest payable on deposits]

Example 2 - The tenant disputes the landlord's deductions

  1. A tenant pays a deposit of £1,000. (cannot be no more than 5 weeks rent)
  2. At the end of the tenancy, the landlord says he wishes to keep £200 to pay for replacing damaged furniture.
  3. The tenant disagrees, claiming the furniture was damaged before they moved in.  
  4. Both agree to use the Alternative Dispute Resolution (ADR) service.
  5. £800 (plus interest) is returned to the tenant, but the disputed £200 (plus interest) is safeguarded until the dispute is settled by the ADR service administrator, and repaid according to the decision.

There are some known problems with the Deposit resolution involving the scheme

If your tenant has not left a forwarding address, or, if they have used their deposit as the last month’s rent and is not responding to the DPS request to pay you the deposit, then after 14 days of them receiving their letter you can request a single claim form for each deposit outstanding, if the tenant still doesn’t respond then you will be paid after 14 days.