Tenancy Deposit Protection - Frequently Asked Questions & Answers For Landlords
- General Questions
- What is a tenancy deposit?
- How does a tenancy deposit scheme work?
- Paying back the deposit
- What are the other tenancy deposit schemes?
There are 35 other tenancy deposit related questions and advice which are available in our member's section. Such sections cover the following:
- Custodial Schemes
- Insurance-based Schemes
- Failure of comply with the Tenancy Deposit rules
- Deposits paid before 06/04/2007
- Existing Deposit Schemes
- Inventories/Condition of Property
Please click here to access these sections and find out more.
Q.1a When did tenancy deposit schemes start?
They commenced on the 6th April 2007. Due to recent court cases, deposits taken before then should still be protected in the schemes however.
Q.1b Do I have to take a deposit?
No - you are not obliged to take a deposit. If you do so, however, then you will have to deal with it in accordance with the tenancy deposit scheme. Otherwise you can suffer penalties.
Q.1c What sort of tenancies will deposit protection apply to?
All deposits taken by landlords in relation to assured shorthold tenancies (ASTs) in England and Wales. It only applies where an AST is entered into.
For more information, FAQs and answers regarding the General section, please click here (you have to sign-up to view the full, in-depth members-only section)
What is a tenancy deposit?
Q.2a What is a tenancy deposit?
The legislation defines a tenancy deposit as money intended to be held as security to ensure that the tenant pays the rent and complies with the terms of the tenancy. Money is defined as cash or otherwise, so it would include cheques, bank transfers credit card payments, money orders and postal orders as well. The purpose of the tenancy deposit scheme is to protect sums of money, deposited with the landlord which are returnable so long as the tenant has paid the rent and has not otherwise broken the tenancy terms.
Please click here for a list of typical tenancy terms and conditions. (you have to sign-up to download them)
Q.2b Can I take a deposit in some other form?
No - deposits can only be paid in the form of money. The legislation outlaws other transfers of moveable property attempted to give as security. Thus you could not take the tenant's Rolex watch off him to keep it during the tenancy as security!
Q.2c What about guarantees?
There is nothing to stop you taking a deposit from a guarantor e.g. from a parent.
For more information, FAQs and answers regarding tenancy deposits, please click here (you have to sign-up to view the full, in-depth members-only section)
How does a tenancy deposit scheme work?
Q.3a How does tenancy deposit protection actually work?
There are two types of scheme: a custodial scheme and insurance-based schemes.
The landlord, not the tenant, will have the option to choose whether to safeguard the deposit in the custodial or an insurance-based scheme.
Q.3b How long will the landlord have to take action?
A landlord will have 30 days to safeguard a tenancy deposit from the day he receives it. The landlord will have to provide the tenant with prescribed information about the scheme safeguarding the deposit within these 30 days along with the Scheme's leaflet.
Q.3c What information does the landlord have to give the tenant?
Within 30 days of receiving a deposit, landlords will have to provide tenants with the details of which scheme is protecting the tenancy deposit. This is the prescribed information. It must be accompanied by a copy of the relevant Scheme leaflet. Separately, the Scheme will give you an official receipt but this is not the same as the prescribed information. For My Deposits much (but not all) of the prescribed information forms part of their official receipt.
For more information, FAQs and answers regarding how tenancy deposit schemes work, please click here (you have to sign-up to view the full, in-depth members-only section)
Paying back the deposit
Q.4a How long does a landlord have to return a deposit?
When the landlord and tenant agree how the tenancy deposit should be returned, in full or in part, it must be paid back within 10 days as follows:
In the custodial scheme: within 10 days of the scheme being notified of agreement between the landlord and tenant or notified of an ADR/court decision.
In the insurance-based scheme: within 10 days of the tenant requesting that the landlord return his deposit
In case of a dispute: within 10 days of the scheme being notified of the ADR service's, or court's, decision.
Q.4b Do the landlord and the tenant both have to agree?
Q.4c Can it be paid back before then i.e. on the last day of the tenancy?
Yes. 10 days is the maximum. Many landlords currently pay the deposit back on the last day of the tenancy. In the insurance-based scheme, if the landlord and tenant agree on the amount to be returned, the deposit can be returned on the last day of the tenancy.
For more information, FAQs and answers regarding paying the deposit back, please click here (you have to sign-up to view the full, in-depth members-only section)
What are the other tenancy deposit schemes?
Q.5 Some local authorities operate rent deposit schemes. Will these be covered by TDP?
It depends. Where a rent deposit scheme actually pays money to the landlord on behalf of the tenant, then this will need to be protected by TDP However, where the rent deposit scheme offers a letter of guarantee, no money passes to the landlord, so TDP will not apply.
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