Do I need to Register my Tenants Deposit?


Yes, you do or you are setting yourself up to be financially crippled! This is an easy one, but such a relevant blog post because there are still landlords out there that disregard this small procedure. Failing to do this can be costly to your investment.

The law states:

The landlord must put a tenant(s) deposit in a government-backed tenancy deposit scheme (TDP) if you rent your home on an assured shorthold tenancy that started after 6 April 2007.

In England and Wales your deposit can be protected with three governing bodies:

  • TDS
  • DPS
  • My Deposits

The law came out to safeguard tenants from Landlord’s who had an issue with returning a tenants deposit.

The landlord can use the tenants deposit to claim against breaches in the tenancy such as failure to pay rent or damages within the property during the tenancy.

The Landlord has 30 days to register this deposit from their receipt of deposit! This means that even if you receive the deposit before a tenancy starts that you MUST register it within 30 days on receipt of deposit. This does not just mean 30 days from the start of the tenancy!
You also have to provide the tenant(s) the relevant information on where the deposit has been protected and whom with.

If you do this, then you are complying with the law.

If you DO NOT do this then the tenant(s) can claim from between 1 and 3 times the monthly rent as compensation and a Judge/Law in the UK will always side with the tenant(s) regardless of what has happened.

If you do not register the deposit within 30 days and you seek possession of the property using a Section 21 form then you will entail great difficulty and complications – as failure to register the deposit will regard a S21 as now invalid!

There are few ways you can register a tenant(s) deposit:

The Custodial Scheme:

The Custodial Scheme is insured and it is when a landlord transfers the deposit amount to a governing body for them to hold on to the deposit.

The insured scheme acts as a middle man in the process, should there be a dispute then they hold the money.

Should the dispute go to arbitration then the money is still held until the dispute is settled.

This scheme is Free of Charge for the landlord.

Pay as you go Scheme:

This means that you can pay a governing body to register or re-register the deposit at the start of each AST (Assured Shorthold Tenancy).

This way the landlord registers the deposit and pays to keep hold of the deposit. This scheme gives the landlord an element of control, where he holds the deposit.

My advice to landlords is make sure the money is still in your account at the end of the tenancy.

When do I return my tenants deposit?

The tenant(s) deposit has to be returned to the tenant(s) within 10 days of both parties agreeing to the amount that the tenant will get back. Failure to do this can result in compensation for the tenant.

What if I have not registered my tenants deposit within 30 days? Am I in trouble?

It is not the end of the world, and many landlords can make this honest mistake. You may be out of the country or just genuinely forget.

My advice here is to contact one of the deposit schemes and let them know ASAP and register the deposit ASAP. “Better late than never is the saying here.”

But please be aware that in a court of law should there be a dispute, things may not go in your favour, so try not to do it!

What about if my tenant is renewing their agreement?

If you are renewing your tenant’s contract and starting another Fixed Term tenancy then you would need to re-register their deposit as it is a new contract and therefore a new AST, even if you have previously registered it. In law you are entering into a new contract and therefore need to re-register the tenant(s) deposit.

You do not need to re-register the deposit if the tenancy agreement runs into a Periodic Tenancy (rolling contract).

The 3 Major Deposit Protection Agencies are:

The DPS – Telephone – 0330 303 0030
The TDS – Telephone – 0845 2267837
My Deposits – Telephone – 0333 321 9401

If you need any help or advice with the above then either call one of the numbers above or you can speak to any one of the team at Keystones Property.

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