Tenancy Deposit Scheme Easy Guide

From 6 April 2007, when a tenant pays a deposit for an assured shorthold tenancy in England and Wales, the landlord or letting agent must protect your deposit through a Government-backed tenancy deposit scheme.

What is a Tenancy Deposit Scheme?

The scheme is a legislation requiring any deposit handed over to an agent or landlord to be secured into one of the three Government approved Tenancy deposit schemes.

Why was the Tenancy Deposit Scheme introduced?

Tenancy Deposit Protection (TDP) was introduced by the Housing Act 2004 as part of a package of measures to raise standards in the private rented sector.

The legislation aims to ensure that tenants who have paid a deposit to a landlord or letting agent and are entitled to receive all or part of it back at the end of that tenancy, actually get it.

In the past there has been a lot of disputes involving deposits between landlord and tenant. A lot of cases emerged where tenants thought their deposit was held unfairly, consequently the tenancy scheme was introduced.

Who does it apply to?

The scheme applies to EVERY landlord and letting agent in England and Wales where a deposit has been taken from a tenant under an Assured Shorthold Tenancy Agreement (AST), after the introduction date, 6th April 2007.

How does it work?

There are two types of tenancy deposit protection scheme available for landlords and letting agents, insurance-based schemes and custodial schemes.

Insurance-based schemes
The tenant pays the deposit to the landlord and then the landlord retains the deposit and pays a premium to the insurer.

custodial schemes
The tenant pays the deposit to the landlord or agent and then the landlord or agent then pays the deposit into the scheme. This option is most commonly used by landlords.

Once the deposit is protected

The deposit must be protected with in 14 days of receiving the deposit. The landlord or agent must give the tenant the details about how their deposit is protected including:

• the contact details of the tenancy deposit scheme selected
• the landlord or agent’s contact details
• how to apply for the release of the deposit
• information explaining the purpose of the deposit
• what to do if there is a dispute about the deposit

After the tenancy

If an agreement is reached about how the deposit should be divided, the scheme will return the deposit, divided in the way agreed by both parties. If there is a dispute, the scheme will hold the deposit until the dispute resolution service or courts decide what is fair

Is securing the deposit into a tenancy deposit scheme necessary?

Yes, it is required by law. Failing to protect a deposit can result to legal prosecution.

Does the tenancy deposit scheme cost anything?

It depends which scheme you use. The following schemes have premium rates:

• Tenancy Deposit Solutions Ltd(TDSL) – www.mydeposits.co.uk
• The tenancy Deposit Scheme (TDS) – www.td.gb.com

However, here’s a Free Deposit Protection Service.

Here’s an in-depth overview Tenancy Deposit Protection Scheme (in pdf format) by the government.

Minimize conflict

When a new tenant moves into a property, it’s always a good idea to draw up an inventory form. An inventory is a detailed list of the contents and condition of the property and any items provided with it, such as furniture or equipment. Having an inventory can help resolve disputes at the end of a tenancy about whether any damage has been caused, or if any items are missing.

Attention! If you're new here, you may want to subscribe to my RSS feed so you're notified of all new blog entries.

Talk / 39 Comments left so far

Rob Blackie wrote this on 2007-05-25 15:31:03 Just to let you know that the custodial scheme is entirely free. 1

Matt wrote this on 2009-03-23 15:55:04 I am aware that I require by law a gas safety certificate when I let my property, but a 'Landlords Safety Certificate' has been mentioned to me also. What is this? Do I need one? Where do I go to get one? Additionally, do I need any kind of certificate to cover any electrical items in the house? Who could issue this certificate? Do I need to provide fire extinguishers and fire blankets? Where do I find out about what I am required to provide for the tenant? Different people give me different answers, do you hav a definitive one please?
Thanks for any help you can give.

Matt 2

The Landlord wrote this on 2009-03-23 16:21:07 Hey Matt,

A "Gas safety certificate" is often reffered to as a "Landlords Safety Certificate". They're the same thing, as far as I'm aware.

If you let property in Engalnd & Wales you must ensure that electrical equipment and system is safe. There isn't a statutory requirement to have annual safety checks on electrical equipment as there is with gas, but it advisable to do so. But no, there is nothing official you need to provide.

You don't need extinguishers and fire blankets for a tenanted residential properties, only multiple shared properties. Tenanted residential properties just need to have smoke alarms, and all upholstered furnishings provided in a rented property must be fire resistant.

Cheers 3

mike wrote this on 2009-05-27 20:08:54 Dear....

I'm having problems getting my deposit back from my landlord, the thing is I moved out over a year ago and we came to an agreemnt for an amount that he could keep for damages over email in settlement of the dispute which he paid. But afterwards I realized I shouldn't have agreed as he didn't provide receipts and i am now in the process of a claim against him.

Can someone advise whehter I Would still be able to get my money back and would the landlord still be fined even though he's paid the agreed amount by muself?

any comments appreciated



Can someone advise whether 4

mike wrote this on 2009-05-27 20:11:15 sorry I forgot to mention the landlord hadn't secured the deposit.

cheers

mike 5

F wrote this on 2009-07-14 10:45:44 So is the DPS site TOTALLY free? ie no sign up fee etc.

Also which would be the best way to give the deposit for them to hold.
Odv going to let the tenents deposit clear in my account first, but which is best, sending off a cheque or a bank transfer ..?

Thankx! 6

Jools wrote this on 2009-07-14 12:03:30 DPS is totally free - it is paid for via the interest the deposits gather whilst in their custody.

No charge for setting up your account. Bank transfer or cheque - whatever is easier. As long as you have an audit trail for your accounts either method!

Jools 7

Jools wrote this on 2009-07-14 12:05:09 Mike - you need to speak to a legal professional about this or to the CAB. Not securing the deposit could lead to a fine so you need to ensure the information you give is correct and accurate.

Good Luck

Jools 8

The Landlord wrote this on 2009-07-14 14:13:33 Hey F,

Yup, Jools is right. That particular scheme is free because they make money from interest rates i.e they put all the money into a bank and keep the interest.
A lot of schemes do charge, though. 9

richard globe wrote this on 2009-08-15 10:40:54 i am currently dealing with a Wirral Landlady where a local Letting Agent wrongly returned the deposit back to former tenants without even notifying her they were even doing that. Despite requesting the relevant registration paper work from the agent and a promise they would,neither her or me have received nothing. I have recommended to the landlady that she immediately starts a small claims action against the agent. 10

Dun wrote this on 2009-08-15 12:17:09 Hi,

My letting agency has failed to register my deposit. They claim they don't need to because I'm on a "short term" agreement of 6 months. I think they probably do (am I right?). I was wondering whether I am able to withhold my last month's rent?

There hasn't been any damage to my room - if there was I would be happy to pay for it - and I wouldn't be considering taking this step if I thought the agency was trustworthy.

Does anyone have any advice please?

Thanks 11

Dun wrote this on 2009-08-15 12:19:05 Sorry, I forgot to say I would be withholding the last months rent on the assumption that they could keep my deposit (which is of equal value).

Thanks 12

Sarah wrote this on 2009-08-19 09:47:23 Dun, some tenancy agreements say the deposit can't be used to replace rent, so check yours.

The letting agent is wrong - they should have registered your deposit.

As a landlord, I used the DPS (free) last year, and withdrew the money this year when my tenant moved out. I kept a portion of the deposit for damages, which the tenant agreed to by entering their password on the DPS site. Their portion went straight to their bank account and mine straight to me. Really easy to use, and even got £4 interest back! 13

Jamie wrote this on 2009-08-20 10:52:20 Ho do i check if my deposit is protected I don't have a tenant ID for the DPS need help please.

Cheers 14

Jools wrote this on 2009-08-20 11:54:47 If protected you would have received a letter directly from the DPS confirming deposit. Your tenant ID would be on the letter. Jools 15

Jamie wrote this on 2009-08-20 12:16:27 Thank you for that information. I take it then as I have not recieved any letter with my tenant ID number on it that my landlord is breaking the law. What can I do to report this?

When I move what am looking to do soon as repairs are not getting done I want my full deposit back to go towards new stuff for my next house.

Cheers 16

Lulu wrote this on 2009-10-08 20:20:34 I have lost my job and given notice to move. I am unable to pay the last month's rent. All bills are paid and there are no damages to the property. Is it within my rights to ask the Landlord's agent to pay it from the deposit. Desperate 17

The Landlord wrote this on 2009-10-09 07:24:48 Hey Lulu,

It's not with in your rights to do that. But you can try, and your landlord may agree.

Kind regards 18

lindsey wrote this on 2009-10-13 08:17:54 Can anyone give me some advice please. A lady recently signed a tenancy agreement on the 24/8 paid deposit and 1st months rent but after a week decided not to move in (deposit wasn't secured) I have recently moved a tenant in on the 9/10 and previous tenant wants deposit back? is she entitled to it?? as I have now had to pay agency fees please help thanks 19

Richard Globe wrote this on 2009-10-13 08:24:20 Lindsey, good morning.

I am the Secretary of the Merseyside and Wirral Property Landlords Action and Support Group. Yes I can help you with your ongoing problem, but please can you ring me tonight on my mobile 07761-813260 if no further assistance is forthcoming.

Richard Globe 20

jools wrote this on 2009-10-13 10:20:55 Hi Lindsey,

if your proposed tenant signed the AST and has now given back word then she loses her deposit. Legally you are within your rights to insist that she pays the entire AST figure but this depends on how likely it is she will pay!!

She is also liable for your agency fee costs and any reasonable costs associated with getting a new tenant.

You could (if you were very nice) take the costs from the deposit and return the balance but you are under no obligation to do so. It is her decision to surrender the AST - DO NOT ACCEPT her surrender as you will be allowed to proceed with obtaining the full contract amount if you do.

To be clear - she forfeited her deposit the moment she broke the AST contract and has no rights in law to recover it.

Jools 21

The Landlord wrote this on 2009-10-13 10:55:43 Hey Lindsey,

I agree with everything Jools said.

Further more, you had 14 days to secure the deposit, and she moved out with in that period, so that shouldn't be a problem either. 22

Tom wrote this on 2009-11-22 23:46:32 I am a landlord, and I wasn't aware of this until today. I am going to put the deposit in tomorrow but I rented out my place 5 months ago.
How much trouble am I in? 23

sonia wrote this on 2009-11-25 09:41:29 How can I be sure my landlord put my deposit into the scheme? Does he should have document to confirm it?
Thanks 24

niki wrote this on 2010-02-08 20:17:29 Hi,

I didn't know about the deposit scheme and I let out my home, so act as a private landlord. Is it too late to put the deposit into DPS? The tenants have been in the property for 7 months, and the assured shorthold tenancy ended in Dec, which i understand is now a periodic tenancy.

Thanks,
N 25

Jools wrote this on 2010-02-08 21:14:22 Hey Niki,

Unfortunately ignorance of the law is not a defence! Suggest you get the bond submitted asap and see what happens. If your tenants get wind of what you have done (not done) be prepared to pony up 3 x the bond in compensation.

Jools 26

Marie wrote this on 2010-02-10 11:15:54 Hi there.

I moved into a private rented house in October last year, the deposit was one month's rent (£240) but i've never had anything at all back from the Landlady about a holding bank ? What are my rights here?

Also my 6month contract is up on 1st April this year - she wants me to do the 6months THEN give 2 months notice - is this legal?? Surely after 6 months i've served the contract even if i do move out on the 6th month? Would i be entitled to my deposit back ?? 27

Marion wrote this on 2010-02-22 11:40:14 Hi

I am coming to the end of a horrendous tenancy. Landlord has openly admitted to me on phone that they haven't kept up with maintenance I have requested, conservatory door can't be opened, I asked 3 times for it to be fixed. When I moved in eaves of house and shed were full of her junk, she said she would remove and hasn't, we had 2 carbon monoxide leaks which resulted in us having no central heating for 5 weeks this winter! I am now moving out, lease expires next week but we have agreed to extend by a month. Landlord has ALL personal mail delivered to house,mobile phone, credit cards, bank, you name it. she also told me to tell anyone asking that I am a family friend, which makes me think she does not have consent to let from her mortgage company. I did take the property on through an agency. She has made at least 6 appointments to come and see me to discuss lease extensions or maintenance and has failed to turn up for any. Leaving me sitting there all afternoon, wasting MY weekend! Then she rearranges for the next day just assuming it's convenient for me. We are currently having viewings at the property. She is giving me 30 mins to 1 hour notice of them, if she is notifying me at all. Yesterday, Sunday afternoon at 4.30pm I got a knock from an agent and a family of 4! I tried to call my landlord and she didn't answer - or return my call. Probably because she knew I was mad!
I have contacted all 3 deposit schemes and my deposit isn't in any of them. When I confronted her she confirmed this to me and said she has it in a 60 day account. Currently she has verbally agreed to give me my deposit back early so I can put it down on another property. There was no signed inventory taken when we moved in. I was a bit naive there, but the property was filthy when we moved in and is certainly better now! She seemed very relaxed and friendly and after a break from renting for 3 years I was stupid enough to trust her.
However, yesterday was the last straw for me. She has absolutely no respect for us, is totally unreliable and untrustworthy.
I want to know if I am within my rights to retain the rent I would've paid next month in lieu of my deposit, considering she has not protected it, and has caused us so many problems.
I don't want to make matters worse, but the fact is without it I can't move into another property. It's £1,150.
Any advice would be gratefully received, i'm at my wits end!

Marion 28

sharran d wrote this on 2010-03-03 15:15:52 Hi i rented a studio apartment, the tenency was for 6 months, i withdraw my tenency becuse the shower was cold an not working, i told him but nothing was done, i left and told him i am not happy about this, he well u can find anoher tenent for me, u must have a freind, i said i dont he has keep my deposit can i get it back, also i did not have a pin num for my deposit 29

jen wrote this on 2010-03-07 17:20:07 hi, mypartner has been living here for 10 years on the day of him moving in he said his money would be in this scheme dps, last june he got a letter saying his money was put in the dps scheme..... thats funny he was told that in 2002, the land lords are selling the house we live in, so would like to move, we've found somewhere, but would like our 750 deposit back for new property, have we received interest? also will we get it back as the house is up for sale anyway?
thanks 30

Aaron wrote this on 2010-04-01 10:34:50 Can someone confirm for me.

As a tenant - should I be charged in any way for this service if its being done for the house Im renting.
I currenlty get charged £60 every 6 months to unprotect and re-protect my deposit.

I cant find anything anywhere that suggests I should be paying. 31

John wrote this on 2010-04-07 20:38:50 Hi there

I am renting a room and the landlord lives in. I asked if my deposit had been registered, but he said this law doesn't apply to live-in landlords. Is this correct?

Thanks
John 32

Shazzie wrote this on 2010-05-18 11:27:04 Hi there, I would like to know if it is the landlord who pays to protect the tenants deposit?

Because my estate agent has deducted money for this out of the tenants rent. 33

The Landlord wrote this on 2010-05-18 12:05:45 Hey Shazzie,

The landlord is responsible for paying for securing the tenancy deposit. But there are free tenancy deposit schemes available!. 34

Shazzie wrote this on 2010-05-18 13:13:39 If there free tenancy deposit schemes why would my agent go to one in which you have to pay? 35

Joanna wrote this on 2010-06-05 10:25:12 Hi
I am thinking if setting up a letting agency. Would you recommend a) where I would hold deposits and b) anything about legal insurance I would need 36

twattybollocks wrote this on 2010-06-05 12:41:07 Joanna,

look, I dont want to sound like I am an arsehole but - there is more to running a lettings agency than just finding out about where to deposit bonds and insurance. Why do you think you will be able to set up and run this business without any experience?

What do you know about AST's etc? If you get something wrong you are going to be sued to f*** and back and if you do not have any experience your insurance company is not likely going to pay up and YOU will be liable for the costs.

For christ's sake - this is why the industry is in such a bad way. Forget shitty landlords its the people who think they can make a fast buck by setting up an agency. This is why the industry needs regulation.

TB

PS - good luck. 37

Richard Globe wrote this on 2010-06-07 17:02:11 Joanna.

Good morning my name is Richard Globe Secretary of the Merseyside and Wirral Property Landlords Action Group.

Yes I can help you with your queries if you have not had any responses as yet. My telephone number after 6pm is 0151-639-6253 38

Mr Ellis wrote this on 2010-07-16 16:14:15 I have never heard the like - ABSOLUTE DISGRACE. 39

Please leave a comment

Click here to cancel reply.

*Name

*Email Address

*Your comment

Notify me via email when someone else leaves a comment