Registering the deposit
Registering the deposit
Contents
This section covers how to register the tenant's deposit at the start of the tenancy. For returning the deposit at the end of the tenancy (including what to do if there's a dispute), see Returning the tenancy deposit.
Most landlords ask for a deposit before the tenant moves into the property. The deposit is security against the tenant leaving the property owing rent or unpaid household bills, or against any damage you think is the tenant's responsibility. The terms of the tenancy agreement should set out clearly the circumstances in which you can keep some or all of the deposit at the end of the tenancy.
Note that:
- In Scotland, the maximum deposit is 2 months' rent.
- In England, the maximum is either 5 weeks' rent (if the annual rent is below £50,000) or 6 weeks' rent (if the annual rent is more than £50,000).
- In Northern Ireland, the maximum deposit is 1 month's rent.
You must:
- Register the deposit with an authorised scheme and keep it protected throughout the tenancy.
- Give the tenant (and anyone who has paid the deposit for them, such as an employer) certain required information about the scheme you have registered the deposit with – see Prescribed information.
If you don't register the deposit or give the tenant the prescribed information
In England, Wales and Scotland, if you don't register the tenant's deposit in an authorised scheme or give the tenant the prescribed information within the required time, the court could require you to pay an amount of up to 3 times the deposit to the tenant in addition to repaying the deposit to the tenant or paying it into an authorised scheme.
In Northern Ireland, the local council could require you to pay up to 3 times the amount of the deposit or might start a court action for this, which could result in a fine of up to £20,000.
Tenancy deposit schemes
Tenancy deposit schemes are in place across the UK. The schemes you can use will depend on where the property is located.
There are 2 types of tenancy deposit scheme:
- Custodial schemes
- Insurance-based schemes
The main difference between them is who holds the deposit throughout the tenancy.
Custodial schemes
Custodial schemes are free of charge; they're funded from the interest earned on deposits held. With a custodial scheme:
- You (or your agent) pay the tenant's deposit into the scheme
- The scheme provider (and not the landlord) holds the deposit
Insurance-based schemes
Insurance-based schemes charge a fee; they provide cover against the landlord failing to return the amount owed to the tenant at the end of the tenancy. With an insurance-based scheme:
- You (or your agent) hold the deposit (in a separate bank account where possible)
- You register the deposit with the scheme (so that it's insured under the scheme)
Scheme providers and when to register the deposit
Scheme providers, and when you must register the deposit after receiving it, depend on where the property is located.
England & Wales
You (or your agent) must register the deposit and give the tenant the prescribed information within 30 calendar days.
In England and Wales, the 3 scheme providers are:
Scotland
You (or your agent) must register the deposit and give the tenant the prescribed information within 30 working days.
In Scotland there are only custodial schemes. The approved scheme providers are:
Northern Ireland
You (or your agent) must register the deposit within 28 calendar days, and give the tenant the prescribed information within 35 calendar days.
The scheme providers are Tenancy Deposit Scheme Northern Ireland and mydeposits Northern Ireland