The Problem with Deposits in the Past
In the past tenants’ deposits were paid directly to the landlord who held them throughout the period of the tenancy. The landlord was required to refund the deposit at the end of the tenancy but was not required to save or protect it in any way. The landlord was also entitled to decide for themselves how much could be deducted from a deposit at the end of a tenancy for damages etc., and how much should be refunded.
This led to problems and disputes in some cases, where landlords and tenants disagreed about the amount of any deductions. There were also problems where the landlord claimed to be unable to repay the deposit, or even could not be traced.
As a result, as of April 2007, the government introduced a tenancy deposit scheme or TDS which legally requires all rental deposits to be taken as part of assured shorthold tenancies to be protected. Landlords or letting agents taking deposits from tenants on ASTs must put their deposit into an approved tenancy deposit protection scheme or TDP scheme for short.
The purpose of TDP schemes is to ensure that tenants can get their deposit back at the end of their tenancy, less any valid deductions, and to resolve any disputes regarding refunds.
Deposits do not need to be protected if the tenancy is an assured tenancy or a protected tenancy, nor if the lodgers or tenants are in student halls.
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