Landlords Must Protect Tenancy Deposits by 6th May

The law has changed regarding tenancy deposits and landlords must place deposits into a Government-approved scheme by 6th May 2012.

Under section 184 of the Localism Act, landlords are now required to protect their tenants’ deposits to avoid being fined. This rule applies to all tenancies that started on or after 6th April 2007. New tenancy deposits must be protected within 30 days of the tenancy beginning.

Landlords or their letting agents must also provide tenants with details of the scheme within 30 days of the tenancy start date. This information includes:

  • Landlords Must Protect Tenancy Deposits by 6th May

    Landlords Must Protect Tenancy Deposits by 6th May

    The contact details of the landlord or agent.

  • The deposit protection scheme used.
  • Why the deposit was charged.
  • How and when the tenant can get their deposit back.
  • What will happen if a deposit dispute arises.

There are three different Government-approved schemes to choose from. These services protect a tenant’s deposit when a landlord or agent withholds the deposit at the end of the tenancy.

If there is a dispute between the landlord and tenant about the amount of the deposit to be returned, the scheme gives an independent review of the case, providing a quicker and cheaper resolution than the courts.

There are two types of scheme: custodial and insurance-based. Using a custodial-based scheme means that the deposit is sent to and held by the firm. If an insurance-based service is used, the landlord/agent holds the deposit and only sends it to the company if there is a dispute.

The following are the schemes you can choose from:

Deposit Protection Service

This is the only free, custodial-based scheme. If a dispute arises, an independent alternative dispute resolution service will review the case.


This insurance-based scheme charges a small fee for its service. It uses an impartial dispute resolution service to settle deposit disputes.

Tenancy Deposit Scheme 

This scheme also charges a small fee for its insurance-based service. If there is a dispute, an independent case examiner reviews the situation impartially.

If a landlord does not protect their tenant’s deposit, the tenant can take them to court. In addition to ordering the landlord to place the deposit in a scheme, the court can fine landlords between one to three times the amount of the deposit in question.



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