Exceeding Expectations

Tenancy Deposit Protection

Tenancy Deposit Protection
  • In April 2007, tenancy deposit law was introduced to encourage good renting practice and to ensure that the interests of both landlords and tenants are protected.

The 2004 Housing Act requires that tenant's deposits for all Assured Shorthold Tenancies in England and Wales are held in a Government approved Tenancy Deposit Protection Scheme (TDP). This prevents landlords from unfairly withholding tenant's deposits.

As a tenant there are a number of benefits associated with TDP:

  • Providing you are entitled to it, it is easier to get your deposit back.
  • Landlords who do not adhere to the scheme may have to pay their tenants a sum equal to three times the deposit.
  • Landlords who do not adhere to the scheme will be unable to serve a Section 21 Notice to regain possession of their property.
  • Potential disputes are easier to resolve.

Paying your Deposit

The value of your deposit will be detailed within your tenancy agreement.

Before you handover your deposit it is advisable to insist that your landlord carries out an inventory and/or schedule of condition. This will record which fixtures and fittings are included within the tenancy agreement and will also document the condition of those items. This will help resolve any disputes that may occur at the end of the tenancy.

As a tenant it is also advisable that you obtain a receipt for your deposit. This will provide proof that you have paid.

Once you have paid your deposit to your landlord or lettings agent it will then be processed in accordance with the Tenancy Deposit Protection Scheme selected.

There are two types of Tenancy Deposit Protection:

  • Insured - if your landlord opts for the Insured TDP they will retain your deposit and pay a premium to the insurer.
  • Custodial - if your landlord opts for the Custodial TDP they will pay the balance of your deposit directly into the scheme.

Whichever option your landlord selects, they are legally obliged to give you details about how your deposit is protected. This information should be provided within 14 days of the commencement of the tenancy. Details will include:

  • Information about the scheme chosen, including contact details.
  • Contact details for the landlord or lettings agent.
  • Information explaining how you can get your deposit back.
  • An explanation to the purpose of the deposit.
  • Information detailing what to do if there is a dispute.

The end of the tenancy

At the end of the tenancy you and your landlord will need to agree whether all or part of the deposit should be retuned. This will be dependent upon any reasonable deductions made by the landlord in respect of damage to the property, non payment of rent, or non performance of the terms of the tenancy agreement.

If an agreement is reached about how the deposit should be divided, the deposit will be returned in the way agreed by both parties.


If you and your landlord disagree on the return of your deposit, the case may, at your instigation, be referred to the relevant scheme under TDP legislation. An independent arbitrator will then decide if your money should be returned to you or used in payment against any loss or damage suffered by the landlord. The deposit will be held until the resolution service decides on the outcome.

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