Tenancy Deposit Scheme
Landlords Notices about the Tenancy Deposit Scheme
As a landlord, there are only three types of tenancy deposit schemes available to you that have been awarded contracts by the government. The schemes are as follows:
• The Deposit Protection Service (The DPS)
• My Deposits
• The Tenancy Deposit Scheme (TDS)
The only other option is to utilize an existing Local Authority Bond Scheme that most local governments already have in place.
If you do not follow these requirements, you will not be able to notify your tenant of the end of their fixed-term contract in accordance with section 21 of the Housing Act 1988 or gain possession of the property through the County Court.
• The tenancy deposit protection scheme is required for all Assured Shorthold Tenancies. You must:
• Protect the deposit in an eligible Tenancy Deposit Protection Scheme within 30 days of receiving it from your tenant, and
• Serve the prescribed information (PI) to your tenant. This gives them full details about the scheme you used. The protection schemes will not serve PI themselves, but may provide a template that you can use instead.
If you don't adhere to these standards, your tenant could be compensated in the County Court by up to three times the value of their deposit.
What is deposit Prescribed information?
The deposit prescribed information (PI) is a document that you must provide to your tenant at the start of their tenancy. It includes full details about the scheme you have used to protect their deposit, as well as other important information such as how you intend to use the deposit during the tenancy.
You must provide this information within 30 days of receiving the deposit from your tenant. If you do not, you will not be able to gain possession of the property through the section 21 eviction process.
When should a Landlord give the deposit Prescribed information to a tenant?
You must give your tenant the deposit prescribed information (PI) at the start of their tenancy. You have 30 days from receiving the deposit to provide this information.
If you do not, you will not be able to notify your tenant of the end of their fixed-term contract in accordance with section 21 of the Housing Act 1988 or gain possession of the property through the County Court.
What should be included in deposit Prescribed information?
Deposit prescribed information must include the following:
- The contact details of the tenancy deposit scheme that has been used to protect the deposit, including a helpline number.
- The contact details of the landlord or letting agent.
- How the deposit will be returned at the end of the tenancy, including any conditions that must be met. For example, if the property is left in a satisfactory condition.
- What deductions can be made from the deposit and when. For example, for damages or missed rent payments.
- How disputes about deposits can be resolved through the Tenancy Deposit Scheme.
What happens if a Landlord forgets to protect a deposit?
If you forget to protect your tenant's deposit, they can take you to court and claim up to three times the value of their deposit. The court will also order you to pay back any interest that has accrued on the deposit.
How can a Tenant get their deposit back?
A landlord can only get their deposit back at the end of the tenancy if:
- All rent owed has been paid in full.
- The property has been left in the same condition as it was at the start of the tenancy, minus any fair wear and tear.
- There are no other charges or deductions that need to be made, such as for damages or missed rent payments.
Are Tenant deposits in schemes 100% safe?
Yes. Tenancy deposit schemes are designed to protect a deposit and give a fair chance of getting it back at the end of your tenancy. If there is a dispute about the return of the deposit, the scheme will hold onto the money until the situation is resolved.
How do I choose the best Tenant Deposit Scheme for my tenant?
There are three different types of tenancy deposit scheme:
- Insurance-based schemes. The deposit is protected by an insurance policy and the landlord is liable if they do not return the deposit in accordance with the terms of the tenancy agreement.
- Custodial schemes. The deposit is held by the scheme throughout the tenancy and returned to the tenant when they move out, less any agreed deductions. The landlord does not have access to the deposit during the tenancy.
- Bond schemes. The deposit is replaced by a bond that is paid to the local authority or another approved body. At the end of the tenancy, the bond is returned to the tenant, less any agreed deductions.
You can find more information about tenancy deposit schemes on the government website .
Is there a charge for using a Tenant Deposit Scheme?
Yes. There is a charge for using a Tenancy Deposit Scheme, which is usually around 10% of the deposit amount. This charge is paid by the landlord when the deposit is protected.
Do I need to register my Tenant Deposit Scheme?
No. Tenancy Deposit Schemes do not need to be registered with any authority, but they must comply with the law.
Why do Landlords use Tenant Deposit Schemes?
Landlords use Tenant Deposit Schemes to protect their tenants' deposits and give them a fair chance of getting it back at the end of their tenancy.
Under the Housing Act 2004, all landlords in England and Wales must protect their tenants' deposits in an authorised Tenancy Deposit Scheme. This law applies to all new tenancy agreements that are signed on or after 6 April 2007, and to all existing tenancy agreements from 24 May 2018. The Tenancy Deposit Scheme also provides a free service to help resolve disputes about the return of deposits at the end of a tenancy.
You can read more about Tenant Deposits below: