You must place your tenants’ deposit in a tenancy deposit protection (TDP) schemes if you rent out your home on an assured shorthold tenancy that started after 6 April 2007. The schemes in England and Wales are:
If you receive a valuable item as a deposit instead of money (eg a car or watch), you don’t have to put it in a TDP.
These government-backed schemes ensure your tenants will get their deposit back if they:
- meet the terms of your tenancy agreement
- don’t damage the property
- pay the rent and bills
You (or your letting agent) must put your tenants’ deposit in the scheme within 30 days of getting it.
At the end of the tenancy
The deposit must be returned to your tenants within 10 days of you both agreeing how much they’ll get back.
If you’re in a dispute with your tenants, the deposit is protected in the TDP scheme until the issue is settled.
If you’ve received a holding deposit from your future tenants (money to ‘hold’ a property before an agreement is signed), you don’t have to protect it. Once they become tenants the holding deposit becomes a deposit, and you must protect it.
Deposits made by a third party
You must use a TDP scheme even if the deposit is paid by someone else, like a rent deposit scheme or a tenant’s parents.