How the tenancy deposit protection scheme works

Landlords across the UK are legally obliged to put any deposits received from their tenants into a tenancy deposit protection scheme if their property is let under an assured shorthold tenancy that started after 6th April 2007.

This tenancy deposit protection scheme was introduced in 2004 as part of the Housing Act, with a view to raising the standards of tenancy agreements within the private sector. The idea behind the scheme is to ensure that any deposits are handled fairly, and all tenants who meet the terms of their agreement are guaranteed to receive their money back when they move out. It also allows landlords to fairly use the deposit to cover any damages or losses of income that they may have incurred during the course of the tenancy. Overall, tenancy deposit schemes are a way for both tenants and landlords to quickly resolve any disagreements that may arise.

Do landlords have to use a tenancy deposit scheme?

Yes, landlords are legally required to protect any deposits that they receive as part of a tenancy agreement within 30 days. If a landlord does not protect the deposit correctly, there are a number of consequences that can happen, including:

  • The tenant may be able to claim three times the deposit amount, plus the amount of the original deposit as compensation.
  • The landlord may not be able to serve a valid eviction notice under the Housing Act 2004.
  • The tenant will have a solid defence to any claim made by the landlord for rent arrears.

Can I take legal action if my deposit has not been protected?

If, for whatever reason, you’re unsure or you don’t know which scheme your money is protected by, it is important to find out as soon as possible.

If your deposit has not been protected by a scheme, you may be within your rights to claim compensation of up to 1-3 times the amount. If this is the case, you should also get your deposit back, though there may be deductions for outstanding rent or damage to the property.

At CEL Solicitors, our expert team of solicitors are on-hand to give you information and advice about your rights as a tenant. Contact our expert team of housing solicitors today on 0808 281 2660 or email info@celsolicitors.co.uk.