The Deposit – a tenant’s guide to Deposit Protection Schemes.

Protect yourself! Make sure that your deposit is in a deposit protection scheme.

Following an article that sparked some debate we decided that it was time to outline a tenant’s rights when it comes to disputing charges, inventories and deposits.

The Deposit

Landlord must put their tenants’ deposits into a Tenant Deposit Scheme (TDS),  if they have an Assured Shorthold Tenancy that started after 6th April 2007 (Housing Act). There are three approved schemes, and if your landlord is not using one of these then your deposit is not protected by law.

The three TDS schemes are:

1. Deposit Protection Service (DPS) click here.

2. MyDeposits click here.

3. Tenancy Deposit Scheme (TDS) click here.

These schemes do not cover holding deposits, and even if someone other than the tenants, ie their parents, pays the deposit, then the landlord is still legally obligated to protect the deposit.

Some small print with TDSs

There are two types of TDS, insurance based and custodial schemes. The DPS is the only custodial scheme and if you are a landlord based overseas you must use this scheme unless you employ a UK agency to manage your properties. Custodial TDSs do not cost the landlord and can be used by agencies and smaller landlords alike, and so this is the most common way to protect a tenant’s deposit.

Under the insurance-based schemes, TDS and MyDeposits the landlord or the landlord’s agent holds the tenant’s deposit and pays a fee to insure it (against the landlord illegally keeping the deposit). If the landlord doesn’t pay the tenant the amount they are owed at the end of the tenancy, the insurer will pay the tenant and try to get the money back from the landlord. If your tenants’ deposits are paid in instalments as part of a rent deposit scheme, you must use an insurance-based TDP scheme.

The landlord must put the deposit in a protection scheme and must write to the tenant within 14 days of the start of the tenancy to provide information on in which TDS the money has been stored and also the unique reference number.

At the end of a tenancy if both you and your landlord cannot agree on the amount of deposit that should be returned to you, if for example, they wish to withhold £40 for cleaning the fridge and you don’t think that this is fair, you can use the TDS’s resolution service. Each deposit scheme has its own resolution service, and both you and the landlord must provide evidence to support your claim. The service is free to use, but both you and the landlord must accept the decision as final.

How can I make it work for me?

Every time you speak to your landlord about anything, make sure that there is a hard copy of it; either an email or a letter. If you have spoken on the ‘phone then send a follow up letter, this way you have evidence of an attempt on your part to notify the landlord.

If there are inventory issues, make sure that you have a copy of the inventory that you signed at the start of the tenancy. If you signed without reading then its just too bad.

Take photos of what is already damaged when you move in, and immediately ask that they be logged on the inventory if they are not to be fixed at some point during your tenancy. Do it in writing. Keep a copy of the photo yourself and then you will have more evidence if the issue goes to a dispute resolution service.

Remember that the decision of a resolution service is final, but it is a lot cheaper than paying for legal advice.

For more tenant advice please visit our Advice Centre.