Tenancy Deposits Guide for Landlords
Buy-to-let landlords have a legal responsibility to protect any deposit that they receive from a private tenant.
In England and Wales, is an obligatory requirement for landlords to protect any deposit received for an assured shorthold tenancy (AST) that started on or after 6th April 2007 in a Tenancy Deposit Scheme.
A Tenancy Deposit Scheme is a Government approved, independent third party which is permitted to protect tenants’ deposits for the duration of the tenancy.
Landlords in England and Wales must register deposits in one of three Government approved schemes:
- Tenancy Deposit Scheme (TDS)
- Deposit Protection Scheme (DPS)
Landlords have a duty to use a Tenancy Deposit Scheme even if deposits are paid by a third party-for example through a rental deposit scheme.
For renters not using an assured shorthold tenancy, landlords can accept items of value as a deposit as a replacement for monies. However, these items are not protected by a scheme.
Under the Housing Act 2004, once a landlord or letting agent has protected a deposit under one of the three schemes, the tenant must be provided with information relating to this protection within 30 days. This is known as the prescribed information.
Information provided must include:
- the address of the rented property
- the amount of the deposit taken
- what scheme the deposit has been protected under
- the name and contact details of this scheme, plus its dispute resolution service
- name and contact details of any third party involved with the deposit
- what would constitute some or all of the deposit being held
- how the tenant can apply for the deposit back
- what to do in case of a deposit dispute
Failure to adhere to deposit protection obligations could see landlords fined up to three times the deposit amount. In addition, landlords would be unable to serve a section 21 notice to regain possession of their property.
A landlord’s guide to Tenancy Deposits
Should a dispute arise at the conclusion of the tenancy agreement, the chosen Tenancy Protection Scheme offers a free dispute resolution service in order to solve the issue. This is not mandatory and both the landlord/agent and tenant must agree to use the service.
The scheme will then make an impartial decision, with the deposit being allocated accordingly.
Scotland and Northern Ireland
There are separate Tenancy Deposit Schemes for landlords in Scotland and Northern Ireland.
Scottish landlords and letting agents are bound under the Tenancy Deposit (Scotland) Regulations 2011. Tenancy Deposit Schemes came into force in Scotland on the 2nd July 2012.
In Scotland, there are also three Government approved schemes, which are:
- Letting Protection Service Scotland
- Safedeposits Scotland
- MyDeposits Scotland
Depending on when the landlord took a deposit, this will alter when they have to comply with legislation. The table below shows key dates for Scottish landlords and under what regulation number they must adhere:
|Date deposit received
||Duty to comply
||Deposit received prior to 7 March 2011 and tenancy renewed by express agreement or on tacit relocation on or after 2 October 2012 and before 2 April 2013
In any other case
|Within 30 working days of renewal
By 15 May 2013
||Deposit received on or after 7 March 2011 and before 2 July 2012
||By 13 November 2012
||Deposit received on or after 2 July 2012 and before 2 October 2012
||By 13 November 2012
||Deposit received on or after 2 October 2012
||Within 30 working days of the beginning of the tenancy
Under Regulation 42 of the Tenancy Deposit (Scotland) Regulations 2011, landlords must provide tenants with the prescribed information within the timescale indicated above.
In Northern Ireland, landlords must protect deposits taken on or after 1st April 2013 in a Tenancy Deposit Scheme. Deposits taken before this date need not be protected.
There are two types of Tenancy Deposit Schemes available-Custodial and Insurance.
The three approved, registered schemes are:
- Tenancy Deposit Scheme Northern Ireland
- MyDeposits Northern Ireland
- Letting Protection Service NI
All deposits must be protected within 14 days of receipt and prescribed information must be given to tenants within 28 days of this date.
Should landlords provide accommodation for university students, any deposits received on or after 1st April must be protected in an approved Tenancy Deposit Scheme. This is regardless of who actually pays the deposit.
Further information on Tenancy Deposits can be found at the Government website.