If you rent your home from a private landlord in most cases your deposit must be protected. How do these schemes work and how can you get your money back if there’s a problem?
Deposit protection schemes
Most landlords ask for a deposit when you move into the property, which they can keep if the property is damaged when you move out or you don’t pay the bills. In the past, many tenants complained that it could be a struggle to get the deposit back, but all deposits have to be protected by a scheme. A landlord has to give you details of which scheme your deposit is protected by within 14 days of you paying it or they’re breaking the law and they have to protect the deposit within 30 days of receiving it.
SAVVY TIP: The deposit protection schemes don’t cover holding deposits which you may be asked to pay to secure a rental property, but they do cover any deposit that a someone renting a property makes (or money that’s kept by the landlord) after they become a tenant.
Private tenants – England and Wales
If you’re renting privately in England or Wales on an assured shorthold tenancy (AST) and your tenancy started or was renewed after 6th April 2007, landlords have to protect your deposit with one of the three deposit protection schemes. An assured shorthold tenancy is the most common type of tenancy agreement by far, so it’s very likely you’re renting with one of these if you have a private landlord.
There are three main deposit protection schemes.
Deposit Protection Service (DPS): This is what’s called a ‘custodial scheme’. That means it holds the deposit money that’s been paid to landlords in a separate bank account. The scheme is free to use.
MyDeposits: This is an insurance based scheme that costs landlords a one-off joining fee, together with a fee every time a deposit is protected.
SAVVY TIP: The advantage for landlords of using an insurance based scheme is that they don’t have to give up the deposit. They can still have the deposit in their bank account until it needs to be repaid.
Tenancy Deposit Scheme (TDS): offers both insurance based and custodial schemes. Only landlords who are a member of a professional organisation, such as the Royal Institution of Chartered Surveyors (RICS), the National Association of Estate Agents, the Association of Residential Letting Agents or the National Approved Letting Scheme can use one of the insurance-based deposit protection schemes.
What tenants must be told
As well as protecting your money, your landlord must give you the following information:
1. the size of the deposit
2. the landlord’s or letting agency’s name and contact details
3. the name of the deposit protection scheme used and contact details
4. what the deposit is for
5. when you wouldn’t get the deposit back (such as if you’ve damaged the property, for example).
In Scotland there are three tenancy deposit protection schemes that work in a similar way to the ones in England and Wales. Deposits were protected for tenancies that started or were renewed after July 2012.
SAVVY TIP: Although most deposits are covered, there are a few exceptions. Shelter Scotland has a useful list of deposits that don’t need to be protected on its website.
Making sure you’re protected
You should ask for written evidence that your landlord is a member of a deposit protection scheme before you sign a rental agreement. If you don’t know what type of tenancy you have, you can check this with housing charity Shelter. It has one tenancy checker for England and Wales and another tenancy checker for Scotland.
Disputes over deposits
Most disputes are over deposits being held back because the property wasn’t clean or bills weren’t paid.
The landlord should carry out a detailed inventory when you begin your tenancy and when you end it. This notes down the state of the property and what — if anything — was damaged or missing.
SAVVY TIP: You should read it carefully to check it’s accurate and sign it. Your landlord may take photos but there’s nothing to stop you from taking your own. It may seem like a faff but, if there’s a dispute it could be your word against your landlord’s.
Don’t be afraid to complain. If you’ve stuck to the tenancy agreement or if your landlord just refuses to hand back the deposit, you should complain. Even if your landlord doesn’t answer any of your calls or emails you can still complain to the relevant deposit protection scheme and if your complaint is valid your deposit will be refunded.
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