Home and living

Tenancy Deposit Protection


A recent report by the Centre of Economics Business Research for Money.co.uk shows that whilst 85% of landlords are compliant in protecting their tenant’s deposits, around 300,000 of UK landlords are estimated to not be. The research suggests that currently up to £514 million’s worth of deposit money is not protected, putting landlords at risk of fines up to three times the deposit value. As a landlord, it is therefore essential to know about your Tenancy Deposit Protection (TDP) obligations.

What is Tenancy Deposit Protection?

Tenancy Deposit Protection was introduced in April 2007, as part of the Housing Act 2004 for all assured shorthold tenancies in England and Wales where a deposit was taken.

Why was it introduced and what are its benefits?

The legislation was introduced because the Government recognised that many deposits were being withheld unfairly at the end of a tenancy. The introduction of TDP was therefore identified as a way to raise standards in the lettings industry and ensure tenants are treated fairly.

Landlords can feel as though they are not trusted with deposits, however in reality the deposit is not their money, but instead the tenants. Deposit protection removes this element of trust, allowing the landlord-tenant relationship to become more transparent.

What are your legal obligations?

From April 2012, as a landlord, you must protect any deposit you receive within 30 calendar days of receiving it.

In England and Wales deposits can be registered with:

There are separate schemes for Northern Ireland and Scotland.

Once you receive the deposit you must inform your tenants on the following within 30 days:

  • The address of the rented property

  • How much deposit you’ve received from the tenants

  • How the deposit is protected

  • The name and contact details of the TDP scheme and its dispute resolution service

  • Why you would keep some or all of the deposit

  • How to apply to get the deposit back

  • What to do if there’s a dispute over the deposit

(Please visit gov.uk for a more exhaustive list)

Disputes

The legislation also introduced standards for the way in which deposit disputes are handled. All TDP providers offer a free Alternative Dispute Resolution (ADR) service for occasions where tenants and landlords can’t agree on if and how much should be deducted from a deposit.

3 top tips to avoid deposit disputes

Deposit disputes between tenants and landlords can be stressful. Follow these simple steps to help reduce the risk of disputes taking place.

1. Inventories

A good, reputable letting agent or landlord should conduct an inventory before handing over the keys, which is then signed by both the tenant and the landlord.

An inventory is a document which shows any wear and tear, damages or imperfections in the properties buildings or contents. It basically details the state of the property at the point the tenant takes residence.

The best inventories are photo or video inventories, as there can be no disputing the state of the property.

At the end of the tenancy, any damages which aren’t detailed on the inventory are then said to be due to the fault of the tenant and so repair or replacement costs could be deducted from the deposit.

Inventories can be pricey but could save you from losing a few hundred pounds in a deposit dispute if you can’t prove the damage was due to the tenant.

2. Know your tenants

Having a good relationship with your tenant can stop disputes occurring. Most disputes are resolved between the tenant and the landlord directly without having to go to an adjudicator. You may be able to come to some arrangement over any repairs or damages.

A good tenant should inform you of any repairs that need to be carried out which in turn allows you as the landlord to reduce the damage to your property and stop them from disputing any claims.

3. Insurance

Insurance is available for both tenants and landlords which covers both parties against accidental or malicious damage that’s caused to the property.

It’s inconvenient if the tenant damages the property and you’re unable to reclaim costs through the deposit. However, if you have the correct insurance in place you can rectify the damages by submitting a claim.

Read our disclaimer.

Home insurance

Comprehensive cover for rebuilding or repairing your home should the unexpected happen, including cover for fire, flood, escape of water and alternative accommodation costs.

Get a quote Find out more