Tenancy deposit schemes explained
In this article
- What is a tenancy deposit?
- How much can a landlord take for a deposit?
- How is my rental deposit protected?
- Which tenancy deposit protection scheme should my landlord use?
- How tenancy deposit protection schemes work
- Your rights if a landlord doesn't protect your deposit
- How to get your tenancy deposit back
- What happens to your deposit if there is a dispute?
What is a tenancy deposit?
Before you move into a rental property, your landlord - or the letting agent, if your landlord uses one - will normally require a sum of money known as a tenancy deposit.
The money acts as security for the landlord in case you do not meet the obligations of your tenancy agreement, such as paying your rent. It can also be used to cover the cost of any damage you make to the property while you live there or items missing from the original inventory.
This guide explains how much you are likely to be charged, how your money should be protected and your rights on getting your money back at the end of a tenancy.
How much can a landlord take for a deposit?
In England, a tenancy deposit is usually limited to five weeks' worth of rent or six weeks' if the cost of the rent is over £50,000 a year.
In Wales and Northern Ireland there isn't a formal cap but renters usually pay one month's rent as a tenancy deposit.
In Scotland, the limit is no more than two months' rent.
How is my rental deposit protected?
By law, anyone renting through an Assured Shorthold Tenancy in England and Wales (this will apply to most people who rent their property) should have their deposit protected in a deposit protection scheme.
Which tenancy deposit protection scheme should my landlord use?
There are three deposit protection schemes in England and Wales:
- Deposit Protection Service
- MyDeposits
- Tenancy Deposit Scheme
Your landlord will decide which scheme to use, but your deposit should be equally protected whichever one they choose.
Scotland and Northern Ireland operate separate schemes, but they work in the same way as detailed below. You can find out more on the Scottish and Northern Irish government websites.
How tenancy deposit protection schemes work
Your tenancy agreement should include information about which scheme your landlord or letting agent is using.
Within 30 days of paying your deposit, your landlord should confirm the following information in writing:
- the address of the rented property
- how much deposit you've paid
- how the deposit is protected
- the name and contact details of the Tenancy Deposit Protection (TDP) scheme and its
dispute resolution service - their (or the letting agency's) name and contact details
- the name and contact details of any third party that's paid the deposit
- why they would keep some or all of the deposit
- how to apply to get the deposit back
- what to do if you can't get hold of the landlord at the end of the tenancy
- what to do if there's a dispute over the deposit.
Your rights if a landlord doesn't protect your deposit
If your landlord does not protect your deposit using a recognised scheme, or does not provide you with the required information, you could take them to court.
However, before taking court action you should first write to your landlord to give them the chance to protect the deposit and/or to provide the information.
How to get your tenancy deposit back
At the end of a tenancy, provided you've stuck to the terms of your tenancy agreement, you haven't done any damage to the property and you've paid all your rent and bills, you should be entitled to your full deposit back.
If you haven't met all of these terms, your landlord may wish to withhold some or all of your deposit to cover any costs they incur. If they need to repair damage you have made to the property, for example, you might not get your deposit back.
Your landlord must return your deposit within 10 days of you both agreeing how much you’ll get back.
What happens to your deposit if there is a dispute?
As well as protecting your money during your tenancy, deposit protection schemes can help resolve disputes that arise between you and your landlord.
For example, if you think your landlord wants to withhold an unreasonably high amount of your deposit to cover their costs, you can complain to the scheme's dispute resolution service.
It will then investigate the facts and determine the dispute. If you use the dispute resolution service, you and your landlord must do what it recommends - its decision is generally final.
Again, once you and your landlord have agreed how much deposit you will be getting back, it must be returned to you within 10 days.
- Find out more: what are my rights when renting from a private landlord?
Need a mortgage?
Find the best mortgage for you, with expert help provided by L&C Mortgages
Get advice now