Deposit Schemes

Overview

If you’re renting out your home on an assured shorthold tenancy that started after 6 April 2007, it's essential to place your tenants’ deposit in a tenancy deposit protection (TDP) scheme.

However, if your tenant offers you a valuable item instead of cash (like a car or a watch), you're off the hook for putting it in a TDP.

These government-backed schemes guarantee that your tenants will get their deposit back if they:

  • Stick to the terms of your tenancy agreement

  • Keep the property damage-free

  • Pay their rent and bills

You, or your letting agent, must place the deposit in the scheme within 30 days of receiving it.

Available Schemes

For properties in England or Wales, you can choose from the following TDP schemes:

  • Deposit Protection Service

  • MyDeposits

  • Tenancy Deposit Scheme

Scotland and Northern Ireland have their own separate TDP schemes.

All TDP schemes provide you with two options:

  • Custodial Scheme: The scheme holds the deposit for free.

  • Insured Scheme: You or the agent keep the deposit and pay the scheme for insurance.

At the End of the Tenancy

Deposits must be returned to your tenants within 10 days after you both agree on the amount they’ll receive back.

In Case of a Dispute

The deposit remains protected in the scheme until any issues are resolved. If you’re in an insured scheme, you or the agent will need to give the deposit to the TDP scheme, who will hold it until the dispute is settled.

Holding Deposits

If you've received a holding deposit (the cash to 'reserve' a property before the agreement is signed), there's no need to protect it. Once the tenants move in, this holding deposit transforms into a full deposit, and you must protect it accordingly.

Deposits from Third Parties

Even if a third party, such as a rent deposit scheme or the tenant's parents, pays the deposit, you must still use a TDP scheme.

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