My daughter is about to rent a flat with friends. They have been asked for a £3,000 deposit. Is there any way they can safeguard the deposit? She has had problems in the past.

JL, London

This perennial problem has now been solved by a law that comes into force on April 6, 2007. The Housing Act 2004 introduces authorised schemes of two types: a “custodian” scheme where the deposit is held by the scheme administrator; and, an “insurance” scheme where the landlord pays an insurance premium to the administrator. Under these schemes, the deposit is safeguarded and assistance is given in sorting out any disputes at the end of the tenancy.

The law only applies to assured shorthold tenancies (which make up most tenancies from private landlords) granted on or after April 6, 2007. So, if possible, your daughter should hold off until then. The landlord must, within 14 days of receiving the deposit, comply with the requirements of the scheme, and the 2004 Act. Failure to do will mean the landlord will have to return the deposit, and pay a sum worth three times the value of the deposit, to the tenant.

Desmond Kilcoyne is a barrister at 22 Old Buildings, Lincoln’s Inn, specialising in property law Our experts cannot send personal replies. Questions may be edited for reasons of space and advice is given without responsibility. Please do not send original documents or SAEs

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