Deposit Protection Service

About the leglislation

Whether you’re a letting agent, landlord or a tenant, knowing about deposit protection law and how it affects you is important. Below we share the history of Tenancy Deposit Protection (TDP) so you can understand both the background to our services and your obligations.

The history of Tenancy Deposit Protection

When was it introduced?

The requirement to protect a tenancy deposit taken for an assured shorthold tenancy in England and Wales was introduced on 6 April 2007, following its inclusion in the Housing Act 2004. Initially, deposits needed protecting within 14 calendar days of receipt by the landlord. This was subsequently changed to 30 days on 6 April 2012 as a result of the Localism Bill 2011.

Why was it introduced?

The legislation was introduced because the Government recognised many deposits were being unfairly withheld at the end of a tenancy. Introducing Tenancy Deposit Protection was identified as a way to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy.

The legislation also introduced standards for the way deposit disputes are handled. All TDP providers need to offer a free Alternative Dispute Resolution (ADR) service for occasions where tenants and landlords can’t agree on how much should be deducted from a deposit. Since we launched our scheme our adjudicators have resolved over 35,000 deposit disputes through ADR.

Who does Tenancy Deposit Protection affect?

The legislation covers virtually all new assured shorthold tenancy contracts used by letting agents and landlords to let a property in England and Wales.

There are some exceptions, and in the following scenarios you won’t need to register a deposit with one of our schemes:

  • If you’re a resident landlord (i.e. you live in the property)
  • If the tenancy has a rental value of over £100,000 a year
  • Company lets
  • Student accommodation let directly by universities or colleges
The Deregulation Act 2015 has been introduced to help clarify some of the more detailed requirements around protecting deposits, particularly those taken before 6 April 2007. Here are the main changes which you should be aware of:

  • Deposits taken before 6 April 2007, for tenancies which have subsequently moved onto a periodic tenancy on or after this date, now need to be protected in a Tenancy Deposit Protection scheme if the tenancy is still running. If a deposit remains unprotected, the landlord could potentially face a fine.
  • For deposits taken before 6 April 2007, where the tenancy became periodic before this date, the landlord is not required to protect the tenant’s deposit. However, the landlord won’t be able to serve a section 21 notice to regain possession of a property unless the deposit is protected.
  • If a tenancy is renewed or rolls over on a periodic basis, landlords don’t need to reissue Prescribed Information to a tenant if the deposit remains with the same authorised scheme, and the parties and premises remain the same.
  • The legislation has also clarified that the reference to ‘the landlord’ within the Prescribed Information includes those acting on behalf of the landlord, such as letting agents.

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