Tenancy deposit protection schemes: explained

Since 2007, private landlords in England and Wales must protect tenancy deposits. The money has to go into a government-approved scheme. This is the law. It helps to know how these schemes work. It also helps to know what happens when a landlord breaks the rules. This can save you money. It can also protect your rights at the end of your tenancy. Below, we cover the three main schemes. We explain the rules landlords must follow. We also explain what you can do if things go wrong.

Why deposit protection exists

Before April 2007, tenants had no real protection for their deposits. Landlords could keep deposits for weak reasons. Tenants had no easy way to argue back. The Tenancy Deposit Protection scheme changed this. It comes from the Housing Act 2004. Now landlords must keep deposits in safe, separate accounts. The scheme also gives you a free way to sort out arguments.

The three government-approved schemes

Deposit Protection Service (DPS): This is the largest custodial scheme. The DPS holds the deposit itself. The money is paid to the DPS, not the landlord. At the end of the tenancy, the landlord asks for the money back. You then either agree or argue about the amount.

mydeposits: This is an insurance-backed scheme. The landlord holds the deposit themselves. They pay a fee to mydeposits for insurance cover. If there is an argument, mydeposits decides the outcome.

Tenancy Deposit Scheme (TDS): This is also insurance-backed. The landlord holds the deposit. TDS gives insurance and helps sort out arguments.

What the landlord must do

Within 30 days of taking your deposit, your landlord must:

1. Put the deposit in a government-approved scheme (or pay the fee for an insurance-backed scheme)
2. Give you "prescribed information", a written document that confirms:

• Which scheme protects the deposit
• The scheme's contact details and how it sorts out arguments
• How to get the deposit back
• When the landlord may take money off the deposit
• The steps to take if there is an argument

This is the law, not a favour. If the landlord does not do either of these things, they break the law.

What happens if your landlord doesn't protect the deposit?

Your landlord may fail to protect your deposit. They may also fail to give you the prescribed information within 30 days. If this happens, you can apply to the county court. The court can order the landlord to:

• Return the full deposit, or
• Pay it into a scheme, plus

The court must also make the landlord pay you extra. This is between one and three times the value of the deposit. In real cases, courts often award three times. This happens where the landlord broke the rules on purpose or did it again and again.

You can make the claim during the tenancy. You can also make it up to six years after the tenancy ends.

There is one more important point. Your landlord may try to give you a Section 21 notice. This is a no-fault eviction notice. They cannot give you a valid Section 21 notice while the deposit is not protected. The same is true if they have not given you the prescribed information. You can use this as a defence if they try to evict you.

How disputes are resolved

Your landlord may want to take money off your deposit at the end of the tenancy. If you do not agree, you can raise a dispute. You do this through the scheme that holds your deposit. This service is free. An independent adjudicator handles it.

You do not need a solicitor. The adjudicator looks at:

• The check-in inventory (if one was done)
• The check-out report and photographs
• Any letters or emails between you and the landlord
• Proof of fair wear and tear

Fair wear and tear: Landlords cannot take money off for normal wear and tear. This is when a property slowly gets worn out from everyday use. They can only take money off for damage that goes beyond fair wear and tear. They can also take money off for cleaning. This applies if the cleaning was not done to the same standard as the check-in condition.

If you did not have a check-in inventory

Not having a check-in inventory can actually help you in a dispute. Without one, the landlord cannot prove what state the property was in at the start. This makes it very hard for them to take money off for damage.

When should I contact Support for Tenants?

Your landlord may have failed to protect your deposit. If so, you may have a large money claim. For deposit protection issues, the route is through the county court. This is separate from a disrepair claim. But your home may also have disrepair, damp, mould, or broken heating. If so, call us on 0800 030 4669 to talk about both issues.

No upfront cost. You only pay if you win, and the fee comes out of the compensation, not your pocket. If you don't win, you pay nothing.

Sources

• Section 213, Housing Act 2004 (tenancy deposit schemes) (legislation.gov.uk)

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