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Deposit Protection Schemes: your complete guide

This guide is to help both landlords and tenants understand how a deposit protection scheme works. We’ve tried our best to answer the important questions, but if you have more don’t hesitate to get in touch with the team at haart.

What does a tenancy deposit scheme do?

The Tenant Fees Act states that a deposit of up to five weeks' rent can be paid when a tenancy agreement is being set up. A landlord must also place a tenant’s deposit into what’s known as a tenancy deposit protection scheme (TDP) within 30 days of receiving it. These are backed by the government and mean that a tenant is guaranteed to get their deposit back as long as:

  • They have met the terms of the tenancy agreement
  • There has been no damage to the property
  • They have paid the rent and bills

What does a deposit cover?

Deposits are paid at the beginning of a tenancy. They are there to cover things like damage to a property, cleaning and unpaid utility bills. When a tenancy ends, the landlord returns the deposit, unless the property hasn’t been returned in a good condition. This doesn’t include wear and tear over a long period of time or any damage that should have been fixed by the landlord.

What type of TDP scheme should a landlord use?

There are two basic types of deposit protection scheme:

  • Custodial - The landlord lodges the deposit for the duration of the tenancy. The money is released back to the tenant when they have agreed with the landlord on how much of the original deposit should be repaid.
  • Insurance - In an insurance based scheme, the agent (or landlord) pays the scheme provider to protect the deposit. The agent (or landlord) holds the deposit funds as a stakeholder. In the event of a dispute, either the landlord or tenant can ask the scheme provider to adjudicate, which will be decided on the merits of the evidence submitted. Once the deposit has been adjudicated, whomever is the stakeholder (the agent or landlord) will need to comply with that decision.

Advice for landlords – Read haart’s advice section

Which TDP schemes are available?

For properties in England or Wales you can use any of the following schemes:

If a property is located in Northern Ireland or Scotland, there are separate schemes available for landlords to use.

When should a tenant receive their deposit back?

At the end of the tenancy the deposit should be returned to a tenant within 10 days of both landlord and tenant agreeing how much will be returned.

What happens if a landlord and tenant disagree on the deposit return?

A tenancy deposit protection scheme is there for this very reason. If the landlord and tenant are unable to agree on how much of the deposit should be returned, the scheme that was used to protect the money will often offer a service to solve the problem.

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