Tenancy Deposit Protection Schemes | UK Tenants Deposit Schemes


From 2007, The Tenancy Deposit Scheme has been a Government backed scheme where the tenants deposit is placed within either a Free Custodial Administered Account (linked above) or an Insurance Scheme where the landlord holds the deposit but pays a premium as ‘insurance’ to pay back the deposit.

The Government introduced this in response to the high number of critics that said that many tenants were left out of pocket by unprofessional landlords who kept the deposit regardless.

  • As a landlord, you must, within 14days give the tenant details on how the money is protected including:
  • The details of the TDS selected.
  • Your details and contact points.
  • How to release the deposit.
  • The purpose of the deposit.
  • If in dispute, what the tenant must do.

The Scheme is administered by three seperate providers giving three types of Deposit Protection.

In basic English, it is:

  • A deposit held by a Government Regulated Custodian or kept by the Landlord and backed by an insurer.
  • Conflict of interest is avoided as at the end of the tenancy both the landlord and tenant must agree what is fair wear and tear, what is negligent wear and tear and what is allowable under the terms of agreement.

Custodial Scheme (FREE):

  • The deposit is handed to a Government backed, custodial third party and held in a safe bank account.
  • At the end of the tenancy and there is a dispute, the third party will hold the deposit until agreement by the landlord/tenant or by the court.
  • It is free as any interest earnt will pay for the running of the scheme and any extra will be paid back to either the landlord or tenant.

Insurance Based (you pay a premium as insurance):

  • The deposit is paid to the landlord.
  • The landlord retains the deposit and pays a premium to the insurer.

Tenancy Deposit Scheme - What happens at the end of the letting period?

Any dispute, the landlord hands over the disputed amount to the scheme until the dispute is resolved.  Click here to read a tenancy deposit case study.

If you, as landlord, with any dispute, fail to comply, the insurer will return the disputed amount to the tenant if so entitled to.