Rent and Credit > What is the tenancy deposit scheme?

What is the tenancy deposit scheme?

Wollit Team2 minute read · Updated 17th September 2024

The Tenancy Deposit Scheme (TDS) is a scheme meant to protect your deposit when you rent, and to ensure that both you and your landlord get fair treatment at the end of a tenancy.

The Tenancy Deposit Scheme was established in the UK to provide a secure and fair way to manage rental deposits. It was introduced under the Housing Act 2004 and became mandatory for all tenancies that started after April 6, 2007.

The main goal of the TDS is to make sure that tenants receive their deposits back at the end of their tenancy, as long as they meet the terms of the tenancy agreement.

Here is how it works, the different types of schemes available, and what it means for you.

How does the tenancy deposit scheme work?

When you pay a deposit, the landlord must place it in a government-approved TDS within 30 days. There are two main types of deposit protection schemes:

Custodial Scheme: In this scheme, the deposit is held by the TDS for the duration of the tenancy. This service is free. At the end of the tenancy, the deposit is returned to you once both you and your landlord agree on the amount to be returned.
Insured Scheme: Here, the landlord or letting agent retains the deposit but pays a fee to the TDS for insurance. The landlord is responsible for returning you the deposit at the end of the tenancy. However, the deposit still stays protected throughout the tenancy.

How can I make sure that I get my deposit back?

Under the law, you have the right to expect your deposit to be protected and returned, as long as you meet the terms of the tenancy agreement.

This includes paying rent on time, not damaging the property, and sticking to any other conditions set out in the agreement.

How can I check if my deposit is protected?

Checking if your deposit is protected is easy. You can do it by entering your details on the TDS website.

If a landlord fails to protect the deposit, you have the right to take legal action, which may result in the landlord being required to pay up to three times the deposit amount as a penalty.

How long does a landlord have to return my deposit?

A landlord must return your deposit within 10 days of both of you agreeing on the amount to be returned. If there is a dispute, the deposit will remain protected until the issue is resolved.

Can my landlord keep my deposit for any reason?

A landlord can only keep your deposit if you have breached the terms of the tenancy agreement, such as causing damage to the property or failing to pay rent. They must provide evidence to justify any deductions.

What if I disagree with the amount my landlord wants to deduct from my deposit?

If you disagree with the deductions proposed by your landlord, you can use the TDS's dispute resolution service. This is impartial and aims to resolve conflicts without the need for legal action.