Tenancy Deposit Scheme- why register your tenants deposit -HealdLaw
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Register your Tenant’s deposit!


The Tenancy Deposit Scheme (TDS) is a government-approved tenancy deposit scheme in England and Wales. Under the Housing Act 2004, Landlords and letting agents are required to protect deposits on assured shorthold tenancies that started after 6 April 2007 in a TDS.

One of the benefits of registering with a TDS is that the scheme provides insurance-backed tenancy deposit protection and free dispute resolution for when disagreements arise over how the money should be divided at the end of a tenancy.

Sounds simple enough, right? Well…

The problem with this requirement is that many landlords and lettings agents do not know they are supposed to comply.
Landlords have 30 days from the date they receive a deposit to register it in a TDS and report to the tenant with what’s called prescribed information, but many landlords tend to keep their tenant’s deposit in a savings account in their name instead.
As a landlord, you may think “Well, if I keep my tenant’s deposit safely in a separate bank account to ensure it is not intermingled with my personal money, there’s no need to have it in a TDS.” While one can understand that thinking, it is wrong. A savings account is not enough. Failing to register a deposit in a TDS is against the law, and the penalties are fairly draconian for a landlord who fails to comply.


If a landlord is found to have failed to adequately protect a deposit, and/or provide the prescribed information, a court can order the landlord to:
1. Repay the deposit in full to the tenant; and,
2. Order the landlord to pay between one and three times the deposit within 14 days of making the order.
3. A landlord’s ability to serve a section.21 notice is also impacted.
Think about it.
If you, as a landlord have taken a fairly large deposit from your tenant, being ordered to repay three times that in addition to returning the initial deposit can be fairly substantial and seriously affect your cash flow. It is not worth taking the risk. Once you are in breach of the rules, you become liable to a claim for the penalty.


Landlords take heed.


If you are a landlord and are not sure about your responsibilities or the potential consequences of your decisions, please call us today 01908 662277