Tenancy Deposit Scheme

What is Tenancy Deposit Protection?

Since the 6 April 2007 all landlords and letting agents who take a deposit from their tenant on an assured shorthold tenancy (AST) in England and Wales must protect it in a government-authorised deposit protection scheme within 30 days of receiving it from the tenant.

The Housing Act 2004 states that the deposit remains the tenant’s money, regardless of the fact they have handed it to you or your letting agent. It was introduced to help ensure that tenants are able to recover their deposit at the end of the tenancy, provided they honour the terms of their tenancy agreement.


The deposit protection schemes

There are two types of government-authorised tenancy deposit protection scheme available:

1. The Custodial scheme: The landlord or agent passes the deposit to the scheme to hold until the end of the AST.

2. Insurance-based schemes: landlords or agents hold the deposit themselves for the duration of the tenancy. A fee is paid to the scheme to protect the tenant’s deposit. If a deposit dispute is raised, the landlord or agent must lodge the disputed amount with the scheme until the dispute is resolved.


About mydeposits insurance based deposit protection

mydeposits provides an insurance based deposit protection scheme.

Landlords and agents can join the mydeposits insurance based scheme and then pay a deposit protection fee to protect each tenant deposit. This protection enables them to hold on to the deposit in their bank account for the duration of the tenancy, and then return the agreed amount to the tenant at end of their stay.

mydeposits does not physically hold the tenant’s deposit unless a deposit dispute is initiated at the end of the tenancy. Your letting agent keeps the deposit in a segregated bank account at all other times.

This enables us to claim on our insurance policy and pay the tenant should your agent fail to provide the disputed amount to us when requested to do so.


An agent’s responsibilities when using the insurance based scheme

When the tenant hands the agent their deposit, the agent must pay a deposit protection fee to legally protect the deposit within 30 days of collecting it.

All deposits that your agent holds are non-transferable and must be held by your letting agent. If your agent passes the deposit onto you to hold then you must join mydeposits as a landlord member.


What is the Prescribed Information?

This includes details about the scheme used to protect the deposit, instructions about disputes and key contact information. We provide our members with the majority of this information in a document that is produced when your agent protects a new deposit, along with the Information for tenants guide. The Prescribed Information must be given to your tenant within 30 days of the deposit being received. Please see the landlord’s section of the mydeposits website for more information.


How does my agent protect tenant’s deposits with mydeposits?

Your agent will register the details of the AST (name of tenants, dates and the amount of deposit) and either lodge the money with us or pay the appropriate deposit protection fee to legally protect the deposit.

A document that proves the protection is produced following the successful protection. It should be given to your tenant by the agent along with mydeposits Information for Tenants leaflet. The document must be signed by either you as landlord or the agent, confirming that all the details are correctly recorded. The Tenant should also sign it to confirm the details too.


At the end of the tenancy

At the end of the tenancy the tenant must ask the agent for their deposit back. Both parties can then discuss the amount of deposit to be returned, including any necessary deductions to the deposit.

Once it’s returned, the deposit (minus any agreed deductions) must be unprotected with mydeposits. We will then write to the tenant at the ‘alternative address’ given to us by the agent confirming the deposit unprotection. Your agent can update the tenant’s alternative address online right up until the point of unprotection. The alternative address is one of the requirements of the ‘Prescribed Information’. Please ensure, wherever practicable, that:

1 The agent tells you about the return of the deposit.

2 The deposit is not repaid without your permission.

Some agents render charges against the deposit at the end of the AST. These charges could form part of any dispute raised by the tenant. The tenant may hold you responsible for these charges.

If the same tenants wish to renew their stay and sign a new fixed-term AST agreement then your agent must re-protect the deposit. The original protection will cease. The only exception is if the existing tenant stays on a rolling statutory periodic tenancy agreement. If you fail to re-protect the deposit then it will be legally regarded as unprotected and penalties may occur.

Using our insurance protection scheme a tenant cannot raise a dispute until 10 days after the property has been vacated and they have formally requested the return of the deposit. After the initial 10 day period has passed, the tenant has up to three months from the date of vacating the property to raise a deposit dispute. If your tenant has not raised a dispute within this period your agent can then release the deposit to you.

When a deposit dispute is raised, your agent must lodge the disputed amount with mydeposits for safekeeping until the dispute is resolved. The entire dispute resolution service should not exceed 60 days.

If your agent goes bust or fails to comply with mydeposits during this process for whatever reason, you will be liable, so it’s important you understand our processes.

Some landlords and their agents have an agreement where the agent protects the deposit and collects the rent but leaves the landlord to manage the property and deal with the check-in and check-out processes. If a deposit dispute is raised in this circumstance we will only deal with the agent member directly and not with the landlord. You will have to provide evidence to your agent to submit and ensure they meet the strict deadlines of the dispute resolution process.


About mydeposits

mydeposits is the trading name of Tenancy Deposit Solutions Limited (TDSL) and has been appointed by Communities and Local Government to administer an insurance-based tenancy deposit protection scheme. TDSL is a company jointly owned by the National Landlords Association (NLA) and HFIS plc trading as Hamilton Fraser Insurance (HFI).

Tenancy Deposit Solutions Limited, trading as mydeposits. Registered office: Lumiere House, Suite 1-3, 1st Floor, Elstree Way, Borehamwood WD6 1JH.



About Deposit Protection Service – Custodial based deposit protection

DPS are authorised by the government to protect deposits for tenancies in England and Wales. They offer a choice of Custodial and Insured schemes and are the biggest provider of deposit protection in the UK. We’ve been providing a simple, hassle-free service for over 10 years so you can rely on them for all your deposit protection needs.

·         Service is free, so you won’t need to worry about membership fees or any other costs, which is why it’s the most popular choice for letting agents and landlords

·         Your tenant’s deposit is protected from the moment it’s submitted, to the end of the tenancy

·         They repay the deposit at the end of the tenancy, saving you administration time and effort

·         Any funds you submit to DPS are 100% protected and are kept separate from the money they use to run the company

The DPS, The Pavilions, Bridgwater Road, Bristol, BS13 8AE.


Book a Property Valuation