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TENANCY DEPOSIT PROTECTION
What is tenancy deposit protection?
Deposits on assured shorthold tenancies (AST's) must be protected with a government approved scheme. Under the Housing Act 2004 the landlord or agent must protect the deposit and issue prescribed information to the tenant within 30 days of receiving it.

If there is disagreement over how the deposit is divided at the end of the tenancy, a dispute can be raised with the scheme and an impartial adjudicator will decide how the deposit should be divided based on the evidence provided.

What is the Tenancy Deposit Scheme?
Tenancy Deposit Scheme (TDS) is a government approved tenancy deposit protection scheme in England and Wales operated by The Dispute Service Ltd. The Dispute Service is an industry owned, not for profit company. What is a "tenancy deposit"? A tenancy deposit is a sum of money which a landlord requires a tenant to pay at the start of the tenancy or which the landlord holds over from a previous tenancy with the same tenant. The money is security in case the tenant does not meet their obligations in connection with the tenancy.

Which deposits need to be protected?
All deposits taken by landlords in relation to assured shorthold tenancies (ASTs) in England and Wales must be protected. This includes 'pet' deposits and 'garage' deposits, but does not include holding deposits. (See more about these types of deposits below) What is prescribed information? You must provide the tenant with specific details of the deposit protection and a leaflet explaining how TDS works. This is called prescribed information. It must be issued within 30 days of receiving the deposit.

Click here for a prescribed information template and scheme leaflet.
What do I do when a tenancy has ended?
We will send you an email reminder when the fixed term tenancy ends. When the tenancy ends without a dispute you must login to your TDS account and end protection of the deposit.

Download the website user guide for instructions on ending a tenancy.
My tenancy has renewed. Do I need to protect the deposit again? You do not need to protect the deposit again if:
  • The tenancy continues on a periodic basis on exactly the same terms.
You do need to protect the deposit again if:
  • You enter into a new fixed term tenancy agreement
  • The tenancy continues on a periodic basis with material changes to the agreement, such as rent or tenants.
It is a requirement of TDS for Landlords Rules of Membership that you protect the deposit again in the circumstances listed above. Unless you notify us otherwise we will assume the tenancy is continuing as a statutory periodic tenancy on exactly the same terms and continue protection on this basis.

What constitutes a 'material change'?
A 'material change' is an important change to the obligations in the agreement. Most commonly this is a change to the rent or the deposit value. A material change could also be a change of tenant or landlord during the term of the tenancy. Please call our Customer Contact Centre if you are unsure.

Do holding deposits need to be protected?
No. A holding deposit is not a tenancy deposit for the purposes of section 212 of the Housing Act 2004 and does not need to be protected.

Do 'pet deposits' need to be protected?
Yes, if it is being paid to a landlord for the purpose of ensuring that the house is properly cleaned at the end of the tenancy, and with a view to returning it to the tenant if the house is clean, then it is a deposit that needs to be protected "Pet deposits" are a form of tenancy deposit within the definition contained in section 212(8) of the 2004 Housing Act.

Do 'garage deposits' need to be protected?
Yes, if it is being paid to a landlord for the purpose of ensuring that the garage is properly maintained, and with a view to returning the deposit to the tenant if it is in good order, then it is a deposit that needs to be protected. "Garage deposits" are also a form of tenancy deposit within the definition contained in section 212(8) of the 2004 Housing Act.

How should deposits paid in instalments be protected?
TDS members should protect the deposit, even if it's paid to them in instalments. You should protect the deposit on the basis of the total amount of the deposit you expect to receive for the tenancy over its life and ensure that the instalments are detailed in the tenancy agreement. If an instalment isn't paid and this will affect the sum registered, please contact us so we can adjust the certificate.

What if the deposit is paid on the tenant's behalf?
The person paying the deposit on the tenant's behalf will be considered a “relevant person”. This is a person, company or organisation who, in accordance with arrangements made with the tenant, paid the deposit on behalf of the tenant e.g. a local authority, employer, parent or guarantor. This relationship does not need to be entered on to the TDS tenancy database, but the landlord will to provide this person with prescribed information.

What happens to the interest on the deposit?
You should check your tenancy agreement as this will tell you what will happen to the interest. When a disputed deposit is paid to TDS, no interest is paid.

What does the Deregulation Act 2015 mean for tenancy deposit protection?
The Deregulation Act 2015 resolves and clarifies issues in the law following the Superstrike v Rodrigues and Charalambous v Ng court rulings.

Click here to read our guidance on the Deregulation Act 2015
Source www.tenancydepositscheme.com