TDP Schemes and You | Landlords Legal Information

The Law

Tenancy deposit protection (TDP) schemes guarantee that tenants will get their deposits back at the end of the tenancy, if they meet the terms of the tenancy agreement and do not damage the property.

Landlords must protect their tenants' deposits using a TDP scheme if they have let the property on an assured shorthold tenancy (AST) which started after 6 April 2007.

The law applies to Assured Shorthold Tenancies (ASTs) created on or after 6th April 2007 in England and Wales (currently, there is no requirement to protect deposits for tenancies in Scotland). If the tenancy started on or after 6 April 2007, the Tenant’s deposit must be protected in one of the government-approved schemes.

If a deposit is not protected, the Landlord will be breaking the law. S/he will be unable to regain possession of the property using notice-only grounds for possession under Section 21 of the Housing Act 1988.

The Tenant can apply for a court order requiring the deposit to be protected, or for the Prescribed information to be given to them. If the court finds that the Landlord has failed to comply with these requirements, or that the deposit is being held in accordance with an authorised scheme, the court must either:

• The court must also order the Landlord to pay to the Tenant (or person who paid the deposit on his/her behalf) an amount equivalent to three times the deposit amount within 14 days of the making of the order.
• Order the landlord to repay the deposit within 14 days of the issuing of the court order, or
• Order the landlord to pay the deposit into the designated account held by the custodial scheme administrator.

Each deposit protection scheme operates a free alternative dispute resolution (ADR) service, in case you and your tenant cannot agree how much deposit should be returned.