A leading buy to let lender is calling on the industry to play its part in making landlords and tenants aware of Tenancy Deposit Protection, launching on Friday 6 April.

Under the new regulations, all landlords will be required to protect their tenants' deposit using one of three government-authorised schemes. Within 14 days of receiving the deposit, the landlord is then required to inform the tenant of how it is protected.

The free custodial scheme requires the full deposit amount to be placed into the scheme until the end of the tenancy.

Two insurance-based schemes allow landlords to retain the full deposit amount themselves. These schemes require a fee to join, and a premium is payable for each protected deposit. Only any disputed amount is passed to the scheme at the end of the tenancy period.

All schemes provide free dispute resolution for any problems at the end of the tenancy. If landlords fail to comply tenants may apply for a court order demanding that the deposit is protected or repaid.

Tenancy Deposit Protection ensures that the good practice already employed by the vast majority of landlords is mandatory throughout the industry. If all landlords understand their responsibilities, it's a positive move for buy-to-let.

Copyright © 2007 First Mortgage Trust