As of April 2007 all tenancy deposits for assured shorthold tenancies have to be held by a recognised Deposit agency. We use "The deposit protection service" and more information can be obtained from this website.
We handle all administration regarding this for both tenants and landlords alike with all managed and let only services. This can be completed for other clients for a charge.
This is now a very important process and failure to complete this (correctly) is likely to render your deposit useless as tenants can easily sue if you do not complete the required paperwork and procedures correctly. We ask for a deposit equal to a minimum of one months rent and we have to send this to the Deposit protection service within 14 days of receipt. They send both the tenants and our office a code to use a reference to each individual deposit.
At the end of any tenancy (once we have seen proof that final utility bills and rents have been paid) we agree any deductions with the tenants and then the DPS will refund the remainder to the lead tenant (specified at the point of application). If we cannot agree, and this can happen, then the DPS will arbitrate on behalf of both parties, assuming we agree, it is not always beneficial to do so.
Tenants should know that really this is in their favour but that deposits are only used when necessary. If you live in a house for any length of time then it's quite common for mishaps to occur for example a stain on a carpet. If there are items to be charged we will obtain quotes first but any deductions are merely an expense of time for us and a pre-move out check (before the final inspection) is available free of charge to highlight any possible deductions, thus allowing you to do any work yourself if need be.