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Tenancy deposits

Tenancy deposits

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Protecting the deposit

England and Wales

When a landlord or letting agent takes a deposit from a tenant for rents up to ?100,000 per annum, the deposit must be protected in a government authorised tenancy deposit scheme. This rule only applies if the tenancy is an assured shorthold tenancy.

For more information, see our ?Types of tenancy agreement? section.

At the start of a new tenancy agreement, the tenant pays you (or the agent) their deposit as usual. You must then register it with a government-approved tenancy deposit protection scheme. If the tenant still occupies the property after the fixed-term tenancy expires (either under a replacement tenancy agreement or a periodic tenancy) and you keep the deposit, you will need to keep it protected in a deposit protection scheme. (For the difference between fixed-term and periodic tenancies, see How to set up a tenancy, under the England & Wales section of ?Duration of a tenancy?).


Eventually all tenancy deposits will have to be registered in a tenancy deposit scheme. This includes deposits for existing as well as new tenancies. The scheme became operational on 2 July 2012 and different deadlines have been fixed for lodging deposits with a scheme, depending on when the tenancy agreement began.

If the tenancy started before 7 March 2011, the deposit must be registered either

  • within 30 working days of the tenancy being renewed, if this happens between 2 October 2012 and 2 April 2013, or
  • in any other case by 15 May 2013.

If the tenancy started on or after 7 March 2011, the deposit should have been registered before 13 November 2012.

Northern Ireland

If you let a residential home to a tenant, you must protect the deposit that they give you. To do this, you must put their deposit in a Tenancy Deposit Scheme within 14 calendar days of receiving it. You must do so even if you use an agent.

You must send a notice containing certain legally required information (the ?prescribed information?) within 28 days of receiving the deposit. What to include in the prescribed information is discussed below.

If you do not give the tenant the prescribed information within 28 days, the local council can make you pay a fine of 3 times the amount of the deposit.

The same applies if you do not protect the deposit. In addition, the local council might start court action for this, which could result in a fine of up to ?20,000.

All landlords must register the deposit with an approved scheme provider and must comply with the scheme?s rules.

Deposit schemes

There are 2 types of scheme: custodial and insurance-based schemes.

Custodial schemes

Under this scheme, money is held by the scheme provider, rather than the landlord, until it is time for it to be repaid at the end of the tenancy. The scheme is free to use as it is funded entirely from the interest earned from deposits held.

In England and Wales, there are 3 custodial schemes: mydeposits, the Tenancy Deposit Scheme and the Deposit Protection Service.

The scheme providers in Northern Ireland are:

Custodial schemes work as follows:

1. The tenant pays the deposit to the landlord or agent

2. The landlord or agent then pays the deposit into the scheme

3. Within 30 days in England and Wales (or 28 days in Northern Ireland) of receiving a deposit, the landlord or agent must give the tenant 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

This is known as ?prescribed information?.

This must also be given to anyone who pays the deposit on behalf of the tenant, such as a parent or employer.

If an agreement is reached about how the deposit should be divided at the end of the tenancy, the scheme will return the deposit in the manner agreed. However, if there is a dispute, the scheme will hold the deposit until the dispute resolution service or courts decide what should happen to it.

Meanwhile, until the matter is resolved, the interest accrued will be used to pay for the running of the scheme with any surplus going to the tenant or landlord, depending on who is entitled to the deposit.

Insurance-based schemes

Unlike the custodial scheme, under the insurance-based schemes the landlord keeps the deposit. There is a fee attached to these schemes to insure against the landlord failing to repay the tenant any money due to them.

In England and Wales, there are 3 insurance-based schemes: mydeposits, the Tenancy Deposit Scheme and the Deposit Protection Service.

In Northern Ireland, there are 2 scheme providers: Tenancy Deposit Scheme Northern Ireland and My Deposits Northern Ireland.

Insurance-based schemes work as follows:

1. The tenant pays the deposit to the landlord or agent

2. The landlord or agent keeps the deposit but it is insured by the scheme

3. Within 30 days in England and Wales (or 28 days in Northern Ireland) of receiving a deposit, the landlord or agent must give the tenant (and any person who has paid the deposit for them) the prescribed information as set out above.

In England and Wales, you (or the agent) should return all or some of the deposit (as agreed) within 10 working days of the end of the tenancy. In Northern Ireland, you should tell the tenant whether any of the deposit will be deducted and repay an undisputed amount as soon as reasonably possible.

However, if there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved. If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant, if they are entitled to it.

The tenancy deposit scheme in Scotland

Deposits must be paid into an approved scheme and the tenant(s) provided with information relating to the deposit, within 30 working days of the beginning of a tenancy. The three approved scheme providers are SafeDeposits Scotland, mydeposits Scotland and the Letting Protection Service Scotland.

The tenancy deposit scheme provider needs to be provided with contact details of the landlord and tenant as well as details of the tenancy and property. Similarly, the tenant will need to know the amount of the deposit and with which scheme provider the deposit has been registered. The circumstances in which all or part of the deposit can be kept at the end of the tenancy should also be explained, with reference to the terms of the tenancy agreement.

The end of the tenancy

Landlords can apply for the return of the deposit as soon as is reasonably practicable after the tenancy has ended. Once the scheme provider receives the application they will contact the tenant to find out if they agree with the amount to be returned. The tenant should respond within 30 days, acknowledging that they agree with the figure or stating what figure they believe should instead be paid. If a tenant fails to respond within 30 days, the landlord will be paid any sum that they consider they were owed.


A free-to-access dispute resolution service will be offered by the tenancy deposit schemes. Landlords and tenants do not need to use this and are free to negotiate matters between themselves.

If a landlord requests to use dispute resolution, their tenant must also agree to do so. The tenant will have 30 days to respond to the request for dispute resolution. If the tenant fails to do so, the deposit will be repaid in line with the landlord's recommendation.

Disputes will be determined by an independent adjudicator. Once the adjudicator has come to a decision, they will notify the landlord, tenant and scheme provider. The scheme will then pay the deposit to each party after ten working days, subject to any review that may be requested by the landlord or tenant.

Decisions can only be reviewed once and only on the grounds that the adjudicator has made an error either in fact or in law. The adjudicator will then review their decision within five working days and inform the parties. This decision is final and cannot be reviewed.


If a landlord fails to use a tenancy deposit scheme, the tenant can apply to the sheriff court either during the tenancy or up to three months after it has come to an end. The court can order that the landlord pay the tenant up to three times the amount of the deposit and/or to meet the requirements of the tenancy deposit scheme regulations.