Farmers who lease out residential property from 6 April must hand over tenants’ deposits to authorised third-parties in a new government scheme, says consultant Strutt & Parker.

Part of the Housing Act 2004, the Tenancy Deposit Scheme means deposits on new Assured Shorthold Tenancies in England and Wales can no longer be held in a landlord’s account, the firm’s Annabel Armstrong said.

“In practice, if your tenancy deposits are held by an agent, little action will be required other than to ensure they are suitably accredited under the scheme.”

Landlords who don’t use a lettings agent and manage their rented properties themselves will have to hand over tenants’ deposits to a government-approved company.

The scheme is designed to prevent unscrupulous landlords from retaining tenants’ funds without valid grounds.

If landlord and tenant cannot agree on the return of the deposit, the case may be put before the Chartered Institute of Arbitrators.