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D is for Deposit Protection

The A – Z of Lettings

D is for Deposit Protection

Overview


A tenants deposit must placed in a tenancy deposit protection (TDP) scheme if a property is let / rented out on an Assured Shorthold Tenancy that started after 6 April 2007. The schemes in England and Wales are:

  • Deposit Protection Service
  • My Deposits
  • Tenancy Deposit Scheme
  • There are separate tenancy deposit protection schemes in Scotland and Northern Ireland

These government-backed schemes ensure your tenants will get their deposit back if they:

  • meet the terms of your tenancy agreement
  • don’t damage the property
  • pay the rent and bills

These are invaluable points to be aware of as over the course a tenancy it’s amazing how clauses in the tenancy agreement can often get forgotten….i.e. tenants “forget” to clean carpets, maintaining gardens and settling utility bills before the leave!!

The landlord or Letting Agent must put or register the deposit in a scheme within 30 days of receiving it.

Information landlords must give tenants

Once your landlord / agent has received your deposit, they have 30 days to tell you:

  • the address of the rented property
  • how much deposit you’ve paid
  • how the deposit is protected
  • the name and contact details of the tenancy deposit protection (TDP) scheme and its dispute resolution service
  • their (or the letting agency’s) name and contact details
  • the name and contact details of any third party that’s paid the deposit
  • why they would keep some or all of the deposit
  • how to apply to get the deposit back
  • what to do if you can’t get hold of the landlord at the end of the tenancy
  • what to do if there’s a dispute over the deposit

At the end of the tenancy

The deposit must be returned to your tenants within 10 days of you both agreeing how much they’ll get back. Any amount of deposit that is in dispute may be retained. However, the balance of the deposit must be returned within 10 days.

If you’re in a dispute with your tenants, the deposit is protected in the TDP scheme until the issue is settled.

Holding Deposits

If you’ve received a holding deposit from your future tenants (money to ‘hold’ a property before an agreement is signed), you don’t have to protect it. Once they become tenants the holding deposit becomes a deposit, and you must protect it.

Deposits made by a third party

You must use a TDP scheme even if the deposit is paid by someone else, like a rent deposit scheme

If you don’t protect your tenants’ deposit!

Your tenants can apply to a county court if you don’t use a tenancy deposit protection (TDP) scheme when you have to. They can do this at any time during the tenancy.

If the court finds you haven’t protected the deposit, it can order you to either:

  • repay it to your tenants
  • pay it into a custodial TDP scheme’s bank account within 14 days

The court may also order you to repay your tenants up to 3 times their original deposit within 14 days of making the order.

At the end of the tenancy

The court may also decide that your tenants don’t have to leave the property when the tenancy ends if you didn’t use a TDP scheme when you should have.

Disputes

Use your tenancy deposit protection (TDP) scheme’s free dispute resolution service if you disagree with your tenants about how much deposit should be returned.

Contact your TDP scheme for more information on the dispute resolution service.


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