Deposit Protection – What You Must Do As A Landlord

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  • Deposit Protection – What You Must Do As A Landlord


You are a thinking about letting out your property? It is important to understand different deposit protection schemes. As a result, you have a responsibility as a landlord to protect your tenant’s deposit.


As of 2007, amendments were made to the Housing Act, requiring all landlords to protect their tenant’s deposit. The Deposit Protection was implemented to protect tenants’ deposits. Ensuring that they are not unreasonable deductions from their deposit.  It was set to minimize disputes and ensure fair treatment to tenants. It safeguards their deposit until the end of their tenancy. Allowing an independent adjudicator not the landlord or letting agent to decide what is to be deducted. It ensures that is the third-party deals with all the resolutions. It is done in accordance with both agreement with the landlord and tenant. If you are a tenant please refer to our previous article that relates to tenant deposit protection – click here. 


Custodial Scheme: 

This requires the landlord to put all the deposit into the scheme. The end of the tenancy has arrived. The scheme now gets the agreement of both the tenant and landlord for the deposit to be returned to each party. This can only be done when both parties have agreed. Therefore, the landlord and tenant must agree what is to be returned.

Want to have a review of all your paperwork, not sure if you are compliant with all the laws? Did you know over the last 5 years there has been in excess of 127 new laws.

Let us review your paperwork and give you advice as to what is required.

Insurance-Based Scheme:

Is slightly different to the custodial scheme. The landlord keeps the deposit. They must register it in the scheme within 30 days. They then pay a fee to the scheme administrator for this. Within the 30-day period of the receiving the deposit the landlord must provide the tenant a prescribed form. This confirms what scheme has been selected. It is in a set form to be served on the tenant. At the end of the tenancy the landlord lays out their deductions to the tenant. He shows what is to be divided between the landlord and the tenant.

However, if there is a dispute the landlord has to refer it to the scheme. The tenant may have to pay for it to be referred. An independent adjudicator that looks at the circumstances of the deductions. It is the sole decision of the scheme and adjudicator to make. They will decide if the deductions are acceptable.

To conclude, there are three current different schemes. However, this can change at any point. They have to be government approved.


TDS is an insured and custodial protection scheme, this option lets the landlord hold the deposit physically; they must however, register under this scheme to acknowledge the existence of the money. A separate account purposely for keeping the deposit. Should the landlord go bankrupt, missing or face any tragedy, the firm will still provide the deposit when needed.


Offers both custodial and insured schemes, operating in two forms it physically holds the deposits and acts as the custodian. Should the landlord decide to keep the deposit physically, the firm insures it. The system requires that the tenants receive back the deposit within ten days after the occupancy period is over. In addition the landlord gives the deposit after checking the state of the house and together with the tenant; they agree on the amount to return.

Are you looking to get a quote for your landlords building insurance? Why not contact our sister company iInsure 365 on 01273 827090. Alternatively click here to get an instant quote.


This is an insured scheme. This scheme deals with any disputes that may arise; in addition, to allowing landlords and agents to hold the money physically.

All three of these schemes require the landlord to deposit the money within thirty days; in addition to serving your tenants with details of your chosen scheme.

Finally, do you want to know more about the deposit protection schemes? Why not contact us on 01273 749169 to discuss it? Harringtons Lettings have been helping landlords since 1993 in Brighton and Hove. We also deal with the whole of Sussex.

What do landlords have to give by way of information to the tenants?

When the deposit has been registered you then have to provide the tenant with certain information within 30 days as follows;

  • The address of the property.
  • How much the tenant has paid.
  • How the deposit is protected.
  • The name and contact details of the tenancy deposit protection scheme and its dispute resolution service.
  • Name and contact details.
  • Name and contact details of any third party that pays the deposit.
  • Why they should keep some or all the deposit.
  • How to apply to get the deposit back.
  • What to do if you cannot get hold of the landlord at the end of the tenancy.
  • What to do if there is a dispute over the deposit.

What people don’t appreciate is that there are prescribed forms for all the schemes that are run by the various providers but you also need to serve a set of terms and conditions on the tenant. We find as letting agents on various occasions that the landlords don’t often supply the tenants with the right information and therefore the deposit is incorrectly held. At the same time you could technically be fined for not dealing with the deposit correctly. Most schemes have a huge amount of paperwork that has to be served sometimes up to 70 or 80 pages.

It is so important you get the paperwork absolutely correct as if there is any issue ever in future and you wish to try and go to court with the tenant then you have to make sure all the paperwork is done properly.


The tenant also has to sign the document to acknowledge they have received it. This is absolutely critical. The document has various different items in it confirming what all the definitions are within the scheme. How they can apply to the scheme etc. You will then find that each different provider deals with things in slightly different ways in how they register it depending on if it is insurance or custodial.

This document needs to be forwarded and provided to the tenant within 30 days of the protecting. It is best to do it on the same time that the tenants move in as you also have to provide them with a how to rent guide from the Government. This must be the latest version. The energy performance certificate, the gas safety, EICR and any HMO license in respect of the property. All of these documents need to be provided to the tenants and acknowledged if at all possible. You have to show the tenant had notice of them by signing them.

What happens when the tenant goes on a month to month basis?

Did you know that many landlords aren’t aware that when a tenant goes onto a month to month basis that you have to reserve all the documents again to the tenants. If you do not reserve them then you are in breach of the deposit rules. There is various discussion on whether you are in breach each time the tenancy clicks round.

For instance, if your tenant was at the property for a period of 10 years and they took out a year tenancy and you didn’t serve the relevant documentation the day they moved in then you could be liable to 10 years worth of fines, each year. The minimum fine is 3 x the deposit plus the deposit itself. However, this is the minimum fine. No the maximum. There are various court cases that show on a regular basis that courts can fine landlords even more if they wish to do so. They often look at the certain circumstances whether it was the landlords intention to register the deposit correctly or not.

Unfortunately, there is no set rules in this regard. The only way is to realise that it is on an individual basis. The minimum is at least 3x plus the deposit.

It is so important that landlords understand what their requirements are and if not then contact us to discuss it.

Do you want a to have a free valuation in relation to your property? Why contact us on 01273 724000 and we will do you a valuation free of charge.


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we chose this letting agents as they chose a good bills company that is much cheaper than other agents. When viewing houses the staff were very friendly and have been very helpful in answering our questions and making the process as easy as possible.
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Professional communication with tenant although entirely impersonal. There was a bigger disconnect in their communication with the landlord in most cases, which seemed to be either slow or non-existent (discovered after contacting the landlord directly).Property was full of spider webs on day 1 despite apparently being professionally cleaned. Took a day off of work to clean it on move out day, leaving it cleaner than when it received but still had to pay part of the deposit for professional cleaning.It has been a while since I have rented, but I'll avoid letting agencies completely now if this is anything close to the average renting experience.
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Great professionalism/communciation from the start up until the end of my tenancy. Definitely set the standards for what agencies should be like. Highly recommend to those within Brighton.
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I have rented with Harringtons Lettings before and have always found the agents to be quick, efficient, friendly and helpful. I loved their service so much I have chosen to rent with Harringtons again. Faultless 😊
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