Custodial scheme - information for landlords

Since 1 April 2013, landlords in Northern Ireland must protect their new tenants' deposits under the Tenancy Deposit Scheme. If a landlord uses a custodial scheme to protect a tenant's deposit, the landlord gives the deposit to the scheme administrator. Landlords must use an approved scheme to protect tenancy deposits.

Paying a tenant's deposit into a custodial scheme

A landlord can pay deposits into the scheme:

  • online
  • by telephone using a debit card or credit card
  • by cheque
  • by bank transfer

Landlords and letting agents should ask the scheme administrator about making payments. It is free to use an approved custodial scheme.

Transferring a deposit between schemes

A landlord can apply to transfer a deposit from one scheme administrator to another. The landlord must lodge the deposit immediately with the new scheme administrator to protect the deposit.

Scheme administrators must:

  • tell the tenant the landlord transferred their deposit to the new scheme
  • confirm to the landlord and tenant the deposit is protected 

Returning a deposit which is protected in a custodial scheme

The scheme administrator only returns a deposit:

  • when a landlord or their letting agent want to move the deposit to another scheme
  • at the end of a tenancy

A landlord cannot make a claim on the deposit during a tenancy.

Landlord applies to a custodial scheme for a deposit

When the tenancy ends, the landlord can apply to the custodial scheme to return the deposit. 

You should tell the scheme administrator how much of the deposit should be returned to the tenant.

The scheme administrator will contact the tenant to see if they agree with the amount you want repaid to them. The tenant has 30 days to reply and tell the scheme administrator if they agree or disagree with the amount. 

Returning a deposit to the tenant

If the tenant agrees with the amount, the scheme administrator must return the deposit to the tenant within five working days.

If a tenant moves out but doesn't give a forwarding address, the scheme administrator keeps any amount due to the tenant in case they apply to the scheme for the deposit later.

Returning a deposit to the landlord

If the tenant doesn't respond within 30 working days, the scheme administrator will return the amount claimed by you, within five working days.

Tenant applies to a custodial scheme for a deposit

The tenant can apply to a custodial scheme for their deposit. The scheme administrator will write to you about the tenant’s request and the amount they asked to be repaid. You have 30 days to respond.

If you disagree with the amount but don’t ask for a different amount to be repaid within 30 working days, the scheme administrator will pay the tenant the full deposit within five working days.

Interest earned on tenancy deposits

A custodial scheme uses any interest earned on deposits to pay the scheme's administration and running costs.

Tenancy deposit scheme administrators

There are three approved scheme administrators in Northern Ireland:

Monitoring of schemes

The Department for Communities monitors the approved schemes.

The scheme administrators report:

  • delivery of their services
  • the financial position of their scheme by providing independently audited accounts, statements on income and scheme costs

More useful links

 

 

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