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Deposit protection schemes – what are your rights as a renter?


Don’t get ripped off by dodgy landlords - know your rights and what you can do when things go wrong.

If you’re new to renting, it’s important to know what to expect from your landlord, especially when it comes to protecting your deposit.

How do rent deposits work?

A deposit is a set amount of money paid by tenants at the beginning of their rental period.

It used to go straight into the landlord’s pocket for safe keeping, to be returned to the tenant – minus any deductions for repair work – at the end of the tenancy.

This system didn’t always work smoothly, with many unscrupulous landlords holding back hundreds of pounds for minor and non-existent repairs.

What are deposit protection schemes?

lady signing document

Deposit protection schemes, first introduced in 2007, are designed to safeguard the rightful return of tenants’ money.

Of course, there are exceptions, eg university halls of residence, tenants who share the house with the landlord, and tenancies that started before 2007.

What schemes are available?

The three main schemes that a deposit cab be registered in the England and Wales are with:

There are separate schemes in Scotland and Northern Ireland.

There are two types of deposit protection schemes available - insurance-based and custodial.

  • In an insurance-based scheme the landlord keeps the deposit and pays a fee to the scheme, so that even if the landlord runs off to Las Vegas, the deposit is returned.

  • In a custodial schemes, the landlord hands over the deposit to the scheme. Any interest earned funds the scheme and any excess interest goes to the landlord or tenant.

A full breakdown of what’s covered can be found on GOV.UK.

How do these schemes work?

After getting your deposit, your landlord has 14 days to protect it in one of the recognised schemes. Within the two-week time limit, they must also let you know:

  • their contact details

  • the contact details of the relevant deposit protection scheme

  • what the deposit is for

  • how to get the deposit back

  • what will happen in the event of a dispute

At the beginning of the tenancy, the schemes expect a clear agreement to be reached about the condition of the property.

This is designed to prevent disputes when the deposit is returned, so make sure that any peeling wallpaper or rising damp is acknowledged beforehand.

What happens if things go wrong?

key on wooden table

The deposit must be returned within 10 days of you moving out. Deductions should only be made to cover damage to the property, or non-payment of rent.

So your landlord can’t take money off the deposit to fund a swish new bathroom suite, or to sort out normal wear and tear.

If there’s a disagreement about the amount of deposit to be returned, all schemes have a free dispute resolution service.

There’ll always be landlords trying to pull a fast one, so ask to see details of the scheme your landlord uses to be sure.

If you do find yourself renting from a dodgy landlord, you can report them to the county court who could award you compensation.

Other ways to protect yourself as a tenant

  • A full inventory of the rental property can be helpful in preventing potential problems when trying to get your deposit back. Take photographs as added protection.

  • Make note of utility meter readings when you move in and leave. Switching providers could also save you money on energy bills.


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