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Protecting Your Rental Deposit

If you’re renting and about to start a new tenancy or leave your old one, your rental deposit will likely be at the forefront of your mind. It’s what helps you secure a tenancy in the first place and you’d expect to get it back when you move out at the end of your tenancy agreement. 

But how can you make sure you’ll be repaid your deposit in full? And what can you do if you face problems getting it back at all? We go into more detail on what your rental deposit is and how it secures your tenants’ rights.
 

What is rental deposit protection? 

Rental deposit protection is a scheme approved by the government that protects the deposit renters pay to live in a landlord’s property. It covers the tenants’ rights and makes sure they’re paid back the initial deposit amount by the end of their tenancy period. 

But this doesn’t mean a full reimbursement for tenants who haven’t upheld their responsibilities as defined in their tenancy agreement. This can include for:

  • Missed rent payments
  • Damages
  • Leaving the property unclean 

All landlords are legally required to submit your deposit into a tenancy deposit scheme (TDP) which is formally approved by the government. 

How does the scheme work? 

The government introduced new legislation with the Housing Act 2004 due to growing concerns over landlords unjustly refusing to repay tenants their deposits. The aim of the act was to secure tenant’s deposits under government secured schemes. This was to allow tenants access to a dispute resolution service should they struggle to be repaid their deposit. 

Having the deposit held by an impartial third-party protects the tenant’s rights at the end of their tenancy, should they face complications. The tenants will know which authorised scheme holds their deposit, as the landlord is legally required to notify them within 30 days of paying the deposit. 

Here’s a breakdown of how rent protection works: 

  • As the tenant, you will pay the rental deposit before the starting date of your tenancy,  upon signing the tenancy agreement. 
  • Your landlord will then choose a government authorised tenancy deposit scheme to secure your deposit until the end of your tenancy. This will either be Deposit Protection Service, MyDeposits or Tenancy Deposit Scheme. 
  • When your tenancy ends and you move out, the landlord will visit the property to assess any damage or neglect. If these apply then they will likely deduct it from your deposit, otherwise you should receive the full amount. 
  • Your landlord is legally required to repay the deposit within ten days of both parties agreeing how much of the original deposit will be returned.
  • If you and your landlord are involved in a dispute regarding your deposit, your designated TDP scheme will hold it until the matter is resolved. 
 

Rental deposit protection is a scheme approved by the government.

What do I have to do? 

Landlords are responsible for securing an agreed amount for a deposit from the tenant at the beginning of a tenancy agreement. The deposit will usually reflect the monthly rent for the property. 

Before requesting and accepting a deposit from a new tenant, the landlord should choose which TDP scheme the deposit will be protected under until the end of the tenancy. This means, as a tenant, you shouldn’t need to do anything. 

Landlords can choose to send the deposit funds directly to their chosen TDP scheme, which is referred to as custodial rental deposit protection. The alternative is to pay the scheme a fee so the landlord can hold the funds themselves. 

At the end of the tenancy, the landlord will evaluate the property. If they feel there is a reason to make a deduction from the original deposit amount, this must be discussed. You will have to agree. Once the final repayment amount is agreed, the landlord must send it to the tenant within ten days. 

Moving into your new home 

It’s justified that, as a tenant, you want to know where your deposit is secured and what you need to do to protect it. Whether your tenancy lasts six months or rolls on every month for several years, you want to do everything you can to make sure you get back as much of your rental deposit as possible when you move out of the property. 

Make sure you review your tenancy agreement in full at the beginning of the contract, so you are sure of exactly what your responsibilities as a renter are. 

These will likely include:

  • Maintaining the property’s cleanliness
  • Not doing anything that could damage the landlord’s fittings and fixtures 
  • Ensuring your rent is always paid on time

Your landlord should provide an inventory, but it is also worth recording any pre-existing damage by taking photos. 

Essentially, tenants need to maintain the condition of the property. But sometimes accidents do happen, which can lead to damages to the landlord’s fixtures and fittings. The cost of these will be deducted from your final deposit.

What if we disagree about the rental deposit? 

Usually, tenants and landlords will reach a decision on how much of the original deposit should be repaid. Communication between both parties is key to resolve matters. However, it’s important to know how to handle any disputes regarding your rental deposit if they arise. This is where your designated TDP scheme can help. 

If you, as the tenant, don’t agree with the final sum of repayment declared by the landlord, you should send evidence for you claim to the TDP scheme you are with. Your landlord will also send any evidence they have. This will then be evaluated by an impartial adjudicator who will decide a fair amount to be repaid.

Both you and your landlord will then be informed of this sum, which must be paid. If either party still disagrees on the final sum, it will then go to court. As the cost of legal involvement will be drastically more than the average price of a rental deposit (£1,110) it’s not usually a path that renters or landlords choose to take.  

Interested in other ways to protect yourself as a renter? Find cover for things like contents insurance to secure your belongings.