In April 2007 it became law for all assured short hold tenancy deposits taken by landlords or letting agents to be protected in a Government-authorised tenancy deposit protection scheme.
The Deposit Protection Service (The DPS) runs the only custodial scheme authorised by the Government. Their custodial scheme means that your deposit is paid to the DPS who hold the money for the duration of the tenancy. At the termination of the tenancy, and when agreement has been reached as to it’s distribution, the DPS then repays the deposit accordingly.
The DPS have provided a useful information sheet for tenants, which can be viewed by clicking here.