I think you mean the "rent" is over £25k.  If this is the case, the deposit will not be protected by the DPS.

Hi Angela,

In simple terms:  There are two main types of agreements that you can use to create an agreement between a Landlord and a Tenant and they are License Agreements (Common Law) and Tenancy Agreements (or otherwise known as Lease Agreements)

1.   TENANCY AGREEMENT
An Assured Shorthold Tenancy Agreement should be used if the following three circumstances are met:

1.   The agreement grants the exclusive possession of the property to the tenant.
2.   A rent is charged during the agreement – this does not only have to be money!
3.   The agreement is over a stated period of time which is normally a fixed term i.e. weekly, monthly, quarterly etc.  The Tenancy Agreement usually is no less than six months and no longer than three years.

A tenancy created after 28th February 1997 became automatic AST’s

2.   LICENSE AGREEMENT - These are NON HOUSING ACT TENANCIES and are bound by contract law i.e. an agreement between two people and are recognised in Court

If a property owner allows someone to live at their property (such as a lodger) and does not grant exclusive possession, the lodger will occupy the property under a License Agreement. 

The tenant may still be required to pay rent and for a specified period of time but would not have the right to exclude others such as the owner from the property.

OTHER EXAMPLES OF WHEN TO USE A LICENCE AGREEMENT?

• The rent is more that ₤25,000 per year (₤2083 per month)
• A lodger renting a spare room in your house
• An employee of a Company who has taken out the tenancy – known as a Company Let
• An au pair staying with you in the property
• A spouse or partner living in your property with you
• Someone who has the owner’s permission to stay at the property
• The property is not the main residence of the Tenant such as a weekend home
• The property is used for holiday lets

I have spoken to the Deposit Protection Service on your behalf to make sure that the info is correct, they have confirmed that for a Common Law agreement, the Deposit cannot be registered with them as the agreement falls outside Housing Act 1996 rules.

You may wish to contact the other 2 schemes yourself... www.thedisputeservice.co.uk and www.mydeposits.co.uk.

With regards to holding the deposit.  This can be by agreement between the Landlord or the Agent.

Hope this helps.

Hi Angela,

Just came across this message from the TDS website...

Latest news
9th September 2008
Will TDS deal with disputes over non-ASTs?


We continue to offer a dispute resolution service for all your tenancies. Whilst it is correct that the Housing Act 2004 prescribes only that deposits taken on ASTs must be protected by an approved scheme such as ours, we are happy to deal with deposit disputes arising out of non-AST tenancies as we have done under TDSRA. (Frequently Asked Questions, paragraph 4.1)

Where you want to include non AST tenancies within the scheme for the purpose of making use of the ADR service where necessary, please do not register these deposits on the TDS database, which is currently only for the registration of deposits for ASTs. (TDS D Operational procedures and advice for members, section 23)

We are looking to refine the database so that it will be able to identify non-ASTs. It would then be possible to register them without distorting the statistics. However, it is not as simple as it sounds and would require those doing mass uploads of tenancy data to modify their own systems. We will not therefore be able to introduce this until the next release of the database at the end of year.

interesting?