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/ by Sheila Cronin

Deposit protection explained

Navigating the lettings market can often be very challenging – even after renting for many years there is always new legislation and processes that crop up and completely throw you for a loop. So, in answer to this dilemma, I have tried to breakdown the nitty gritty side of the tenancy deposit protection process so that you, as a tenant, feel better prepared:

Tenancy deposit protection explained

In April 2007 the mandatory tenancy deposit protection was introduced as there were many concerns that tenants’ deposits were being unfairly withheld or misappropriated by landlords and/or agents. Since then, anyone who takes a monetary deposit from a tenant for an Assured Shorthold Tenancy (AST) must protect it with one of the government-appointed schemes to guarantee its safe return at the end of the tenancy. These three schemes are:
The Tenancy Deposit Scheme (TDS)

My Deposits

The Deposit Protection Scheme (DPS)
Each of these schemes offers a free and impartial Additional Dispute Resolution service as well as insurance-based deposit protection. This is when your landlord, or their agent, holds the deposit during the tenancy and takes out an insurance policy to cover it. In addition, the DPS also offers a custodial option, which means they would hold your deposit until an agreement had been reached at the end of the tenancy between you and your landlord.

What happens when my landlord has a claim against releasing my deposit at the end of the tenancy?

Your landlord will need to provide you with details of any amounts they may wish to claim from your deposit as soon as possible after the tenancy ends. This may include compensation for damage to an item rather than actually replacing it. For example, a small mark on a carpet doesn’t necessarily mean the whole carpet has to be replaced, but it does lessen its value. A claim may also be to compensate your landlord for some other breach of the tenancy agreement, perhaps if rent has been paid in arrears. If you can’t reach an agreement with your landlord, then a dispute will be in place.What happens to my deposit at the end of the tenancy and there is no dispute?

When your tenancy agreement comes to an end and there is no claim, or there is no dispute between you and your landlord, then the holder of the deposit would typically pay the money back to you within ten days of an agreement being reached.

What happens if I can’t come to an agreement with my landlord?

In some instances, when you and your landlord are in a dispute and it can’t be resolved, then both of you would have up to three months from the end of the tenancy to ask the scheme’s Alternative Dispute Resolution Service to adjudicate; in the meantime, any undisputed amount of the deposit should be returned to you.

When should my deposit be protected?

Although each scheme comes with their own set of rules, they all have to comply with the Housing Act 2004, which means that there are certain rules that your landlords / agent have to abide by, such as protecting your deposit within 30 days of receiving it. They would also have to provide you with certain information known as ‘prescribed information’, within the same time frame. This ‘information’ fully explains how and when the deposit will be protected and returned to you and what happens if it isn’t.

For more information regarding the different schemes take a look at this useful link: https://www.gov.uk/tenancy-deposit-protection/overview
 

About our expert View all posts by this expert

Expert Sheila Cronan
Sheila Cronin Head of Compliance at KFH at Head Office

Sheila joined KFH in 2012 as Head of Compliance and has gained extensive experience working in several positions in the lettings industry. She began her career 28 years ago working her way up from a branch administrator to Manager of a Letting Support Centre, where she worked for several years. Sheila later became the National Technical Officer, advising on legal, compliance, training and process matters and day-to-day general advice. In her spare time Sheila likes to relax with her husband and two children and watch sport - particularly football.

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