Tenancy Deposit Schemes

Tenancy Deposit Protection (TDS) applies to all assured shorthold tenancies entered into after the 6 April 2007 where a deposit is taken. Virtually all new contracts to let a property with a private landlord are assured shorthold tenancies.

When you are signing a new tenancy agreement with your landlord, ask how your deposit will be protected. Your landlord should provide you with the contact details of the scheme protecting your deposit.

There are two types of TDS:

Custodial scheme & Insurance-based schemes
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Custodial scheme

bullet  the tenant pays the deposit to the landlord
bullet  the landlord then pays the deposit into the scheme
bullet  within 14 days of receiving a deposit, the landlord must give the tenant information about the scheme being used and the tenancy
bullet  at the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme which returns the deposit, divided in the way agreed by both parties
bullet  if there is a dispute, the scheme will hold the amount until the dispute resolution service (Alternative Dispute Resolution) or courts decide what is fair
bullet  the interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will used to offer interest to the tenant, or landlord if the tenant is not entitled to it.
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Insurance-based schemes

bullet  the tenant pays the deposit to the landlord
bullet  the landlord retains the deposit and pays a premium to the insurer – the key difference to the custodial scheme
bullet  within 14 days of receiving a deposit, the landlord must give the tenant information about the scheme being used and the tenancy
bullet  at the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit
bullet  if there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved
bullet  if, for any reason, the landlord fails to comply the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.

For more information on the TDS see our pages on tenancy deposits.

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Page last updated: April 4, 2013