TENANCY DEPOSIT PROTECTION
From 6th April 2007 all deposits taken by landlords for Assured Shorthold Tenancies in England and Wales (this covers the vast majority of tenancies) must be protected by a tenancy deposit protection scheme.
Why is Tenancy Deposit Protection being introduced?
Tenancy Deposit Protection will apply to all assured shorthold tenancies in England and Wales where a deposit is taken.  Virtually all new contracts to let a property are assured shorthold tenancies.  Tenancy Deposit Protection has been introduced:

To ensure good practice in deposit handling, so that when a tenant pays a deposit, and is entitled to get it back, they can be assured that this will happen,

To assist with the resolution of disputes by having an Alternative Dispute Resolution service (ADR).  It will also encourage tenants and landlords to have in place, from the outset, clear agreement on the condition of the property through best practice, such as the use of inventories, and agreement on the condition of the property.
Who is to administer the Scheme?
The Government has awarded contracts to three companies to run tenancy deposit schemes from 6 April 2007. 

Computershare Investor Services plc will run the single custodial deposit scheme, with the Chartered Institute of Arbitrators providing the ADR service.

The Dispute Service Limited will run an insurance-based scheme directed primarily at letting agents.  It will also run the scheme's ADR service.

Tenancy Deposit Solutions Limited will run an insurance-based scheme, sponsored by the National Landlords Association and administered by Hamilton Fraser Insurance, which will be directed primarily at landlords.
How does it work?
After 6 April 2007, when the tenant signs a new tenancy agreement with the landlord/agent, they can ask how their deposit will be protected.  The landlord/agent will provide the contact details of the scheme protecting the deposit.

Premier Properties is registered with The Dispute Service Limited. The tenant pays the deposit to Premier Properties as the landlord's agent.  We hold the deposit in one of our client accounts and pay a premium to the insurer.  Within fourteen days of receiving the deposit we will give the tenant prescribed information (to be set out in secondary legislation) about the scheme being used and the tenancy.  At the end of the tenancy, if the landlord and the tenant agree how the deposit should be divided, Premier Properties returns all or part of the deposit.  If there is a dispute, Premier properties must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.  If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.

The deposit must be returned within ten days of the landlord and tenant agreeing how the deposit should be divided, or within ten days following notification of an ADR/court decision.