Student tenant tips: Is your deposit protected?

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The new term is approaching and the nation’s students are getting ready for the big move! Over the next few weeks we will be blogging advice for student tenants on one of the most controversial parts of renting from a private landlord – your tenancy deposit. All being well you should get your deposit money back when you leave, but whether you do or not depends on the action you take from day one, so check our blog regularly for all the advice you need on how not to lose your deposit.

If you pay a deposit on an assured shorthold tenancy it's a legal requirement for your landlord to protect the deposit. If you're not sure if you have an assured shorthold tenancy, click here to visit Shelter's Tenancy Rights Checker.

What is a tenancy deposit?

In the last blog we gave advice on holding deposits; money that you will usually hand over before you sign the tenancy agreement in order to confirm you are serious about renting the property, allowing the agent to stop advertising it and not accept further interest from other potential tenants.

The majority of tenants also pay a tenancy deposit. This deposit, usually between the value of 4 and 6 weeks rent, is paid as a security against costs that you cause the landlord by breaking any terms of your tenancy agreement – most commonly cleaning costs, costs of damage to the property, or for unpaid rent. At the end of your tenancy the deposit should be returned to you, minus these possible deductions.

What is deposit protection?

Since 2007 it has been a legal requirement for landlords and agents to protect tenancy deposits in any one of three government backed schemes. The law only applies to ‘assured shorthold tenancies’ - the standard type of tenancy when renting from a private landlord (note it will not apply in student halls, social housing, or some other particular types of shared accommodation.)

  • Your deposit must be protected within 30 days of payment, or the start of the tenancy (whichever is sooner)
  • You must received prescribed information, written details of how your deposit is protected, also within this 30 days.

There are three schemes available and it is for your landlord or agent to decide which one they use, however they all serve the same purpose.

When protected with a scheme, if you believe your deposit is being withheld unfairly and you cannot come to an agreement with the landlord, you can use our free dispute resolution service. An impartial adjudicator will examine evidence provided by you and the landlord to decide how much of the deposit your landlord is entitled to keep.  Your money is also protected against landlords losing or even disappearing with your money, if this happens you can apply to the scheme to have your deposit returned to you.

Before tenancy deposit protection tenants' only way of challenging unfair deductions was in court. Adjudication with TDS is free to use and is completed within 28 days.

Where is the money?

If your deposit is protected with the Tenancy Deposit Scheme your landlord or agent will hold the money during your tenancy and it is protected by our insurance. If for any reason your landlord does not repay deposit money which you are owed we are able to refund you the amount.   

Two other schemes exist, MyDeposits and the Deposit Protection Service (DPS) which both provide this insurance based system. However if protected with DPS the money is more likely to be paid to the scheme and held there during the tenancy (‘custodial’ protection). Both you and your landlord/agent must contact the scheme directly to have it released when you move out.  

Is my deposit protected?

You can find out online if and where your deposit is protected; click here to find out if it is protected with TDS. You can also check all three schemes here via Shelter's website.

You must be given written details of your deposit protection within 30 days of paying the deposit or of the tenancy starting, whichever is sooner. This is called ‘Prescribed Information’ and includes a leaflet which explains in full how the scheme works and what to do if you need to use our dispute resolution service.

In the eyes of the law, providing you with this prescribed information is just as important a requirement as actually protecting the deposit. So, check through all of your paperwork and ensure you have been given these documents.

What if my deposit isn't protected?

Protecting the deposit and serving prescribed information is a legal requirement, so if you think your deposit is not protected contact your landlord directly to confirm. If he has not your landlord faces several penalties:

  1. Repaying the deposit to the tenant in full
  2. Compensation to the tenant of between 1 and 3 times the value of the deposit.
  3. Stopped from using a section 21 notice to evict the tenant 

Unprotected deposits must be pursued through the courts, each scheme can only deal with issues relating to deposits which have been protected with them. For information and legal advice you can contact your local Citizens Advice Bureau.  

Next time....Top tips for moving in

In the mean time, take a look at our YouTube video on how not to lose your tenancy deposit!


Posted by Chris Kendall on 12 September 2014

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