Tenancy Deposit Schemes

Sections 212-215 of the Housing Act 2004 made tenancy deposit schemes compulsory for all residential assured shorthold tenancies (ASTs) created after 6 April 2007.

This means that any deposit paid by a tenant to a landlord must be protected by one of three government-backed schemes: the Tenancy Deposit Scheme, MyDeposits or the Deposit Protection Service.

The aim of this legislation is to protect tenants and landlords. It protects a tenant by ensuring the deposit is returned at the end of a tenancy (except to the extent that the landlord has a legitimate claim on that deposit) and it protects the landlord if a tenant abandons or damages the property. It is not possible for parties to a tenancy to contract out of the deposit scheme.

To comply with the legislation, a landlord must fulfil a number of requirements within 30 days of receipt of a tenant’s deposit. Note that for ASTs entered into before 6 April 2012 the requirements must be fulfilled within 14 days.

The landlord must comply with the initial requirements imposed by the deposit scheme. The landlord must provide the tenant with prescribed information.

This includes general information about the scheme, such as its name and address. It also includes more specific information, such as the amount of deposit paid, the address to which the deposit relates, details of the landlord and any circumstances in which the deposit may be retained by the landlord under the terms of the AST.

The landlord should also sign a certificate confirming that the information provided is accurate to the best of their knowledge.

Of course this means that a landlord must protect a tenant’s deposit with a tenancy deposit scheme within this timeframe in order to provide the prescribed information.