A landlord can ask a tenant to pay a deposit at the start of a private tenancy. This money is for:
- protection against damage to the property
- unpaid rent
Since 1 April 2013, you must protect all tenancy deposits paid to you in an approved Tenancy Deposit Scheme. You don't have to protect deposits you received before 1 April 2013.
What a landlord must do with a tenant's deposit
You must protect a deposit in an approved scheme within 14 days of receiving it. You must also give the tenant information about the the deposit and the scheme that is protecting it, within 28 days of receiving the deposit.
This information must include:
- the amount of deposit protected and the address it relates to
- your full name and contact details
- details of any agent acting on your behalf
- the tenant’s contact details
- details of the scheme protecting the deposit
- details of how the deposit will be paid back and circumstances when you may keep some or all of the deposit
- what happens when the tenant is not contactable at the end of the tenancy
Landlords living outside Northern Ireland
All landlords letting a private tenancy in Northern Ireland must protect their tenants' deposits. If you don't live in Northern Ireland, you must give the Tenancy Deposit Scheme a contact address in Northern Ireland.
If you take a deposit for a private tenancy, you must follow the law and protect the deposit. If you use a letting agent, they are responsible for protecting your tenant's deposit.
Receiving deposits by instalments
Some tenancy deposit schemes might protect deposits paid by instalments. Check with individual scheme administrators.
A holding deposit
Sometimes you may take a holding deposit before you and the tenant agree a tenancy.
If the tenant's holding deposit becomes the tenancy deposit, you must protect the deposit in an approved scheme.
How the scheme protects deposits
Deposits must be held in special bank accounts regulated by the Financial Conduct Authority. This keeps a tenant's deposit safe if the scheme fails.
The three approved schemes are:
Inventory for the rented property
It is important to have a written inventory:
- at the start of the tenancy
- when the tenancy ends
If the tenant agrees the inventory at each stage, this can prevent disputes.
You should check if you need to update the inventory. Landlord organisations and individual scheme providers can give you advice.
You can write the inventory or an agent or organisation can write it.
To use inventory templates, go to:
An inventory is helpful in supporting a claim on a deposit. If you and the tenant disagree about the deposit, you and the tenant might need to give evidence. If there isn't an inventory or other suitable evidence, this could affect the decision about the dispute.
For information about solving disputes, go to:
Student deposits paid on or after 1 April 2013
If you rent accommodation to students and received their deposits on or after 1 April 2013, you must protect their money in an approved Tenancy Deposit Scheme.
If you take a deposit months before the tenancy starts, once the tenancy is agreed and the deposit held becomes the security for the tenancy, you must protect it in an approved Tenancy Deposit Scheme.
If you let a property to several tenants on one tenancy agreement, the scheme administrator might need one tenant as the main contact. They might prefer to contact one tenant about:
- the tenancy
- the deposit
- any dispute that might arise when the tenancy ends
Schemes must allow each tenant on the tenancy agreement to access the scheme and its services.
Selling a property during a tenancy
You should tell the tenant and the scheme administrator protecting the deposit if you want to sell the property during a tenancy.
If the deposit is already protected in an approved scheme, the scheme administrator will hold the deposit until it is due to be repaid.
If you fail to keep to the tenancy deposit regulations
A tenant can contact the Environmental Health office in the local council if you don't:
- protect their deposit within 14 days of receiving it
- give them written information about their deposit within 28 days of receiving it
If the council finds you broke the law, they can fine you three times the amount of the deposit. If the council imposes a fine, this applies to you not the tenant.
The council can also take you to court if you don't protect the deposit. The court might fine you up to £20,000.