Insights and Opinions Sandy Bastin 16/09/2021

A Quick Guide to Tenancy Deposit Protection for New Landlords

**** of NRLA deposit partner TDS shares all you need to know about deposits when starting out on your buy-to-let journey.

With a buy-to-let boom predicted as the private rental market continues to grow, new landlords and business entrepreneurs are emerging to take advantage of increasing demand.

One area of private property management that may not be fully understood by new landlords is the legal requirement of tenancy deposit protection.

There’s a lot more to it than simply choosing an insured scheme (where you hold the deposit and the scheme protects it for a low fee) or a custodial scheme (where the scheme holds the deposit for free).

To ensure you don’t fall foul of the law, there are critical timings, documents and processes you’ll need to be aware of.

Not only will this help you to avoid financial penalty, but an understanding of the essentials will also help you to prevent unnecessary deposit disputes at the end of tenancy.

Here’s a quick guide to tenancy deposit protection from the government-approved Tenancy Deposit Scheme (TDS) whose adjudicators have built a reputation for resolving disputes quickly and fairly.

TDS is also known for providing a wealth of free and useful resources, guides, workshops and impartial content to landlords, agents and tenants.

Make sure you visit the online Information Lounge for downloadable publications, tools, articles and case studies about deposit disputes and more.

  • Make sure you protect your deposit within the timeframe

Deposits on assured shorthold tenancies (ASTs) must be protected with a government-approved scheme like Tenancy Deposit Scheme (TDS) within 30 days of receiving the deposit. It’s important to note that a holding deposit is not a tenancy deposit for the purposes of section 212 of the Housing Act 2004 and does not need to be protected.

  • If the deposit is paid by someone else on the tenant’s behalf, deal with it correctly

The person paying the deposit on the tenant’s behalf will be considered a “relevant person”. This is a person, company or organisation who, by arrangements made with the tenant, paid the deposit on behalf of the tenant, for example, a local authority, employer, parent or guarantor.

In TDS Insured, this relationship does not need to be entered into the TDS tenancy database. In TDS Custodial, this relationship does need to be entered against the deposit protection.

  • Serve your Prescribed Information on time (and not too early)

The landlord (or their agent) must issue prescribed information to the tenant (or the ‘relevant person’) with the scheme leaflet within 30 days of receiving the deposit.

Since the time limit runs from when part or all of the deposit is deemed to have been received, serving Prescribed Information before this is not recommended (even if you are trying to be efficient) as it won’t comply with the legislation. Best practice is to maintain a record to show when the documents were served to show they were clearly provided within the designated time.

  • Conduct thorough inventory reports for evidence

If there is a dispute at the end of tenancy, an adjudicator will consider the evidence put forward by both parties regarding the changing condition of the property. Without a comprehensive inventory and detailed check-in and check-out reports, it can be extremely difficult to persuade an adjudicator that deductions from the deposit are justified, as they can’t compare the differences from start to end of tenancy. Use an app like the Inventory Hive to ensure you don’t miss out on collecting the right level of detail at each stage of tenancy.

  • Comply with the Tenant Fees Act

The Tenant Fees Act prohibits landlords from charging certain fees and excessive deposits. It is therefore vital that you check your deposit amount against the Deposit Cap regulation and review permissible tenant fees in the latest TDS Tenant Fees Matrix. Rules do differ on fees throughout the UK so don’t assume the same applies in England and Wales, for example, or you may get caught out. You can find out more about this on TDS’ suite of online tools at, which includes a handy deposit cap calculator. 

  • Keep an auditable record of communications during tenancy

Communication often helps to avoid disputes. If tenants make you aware of issues with the property during tenancy (as they should), you should respond and act as soon as possible – and you should keep a record of that action too. Keeping tenants’ contact details up to date is also important as this will make communication far easier should a dispute arise.

  • Follow the correct end-of-tenancy process for the scheme

In the TDS Insured scheme, we will send you an email reminder when the fixed term tenancy ends. When the tenancy ends without a dispute you must login to your TDS account and end protection of the deposit.

In TDS Custodial, you should speak to the tenant in the first instance about any deductions you are seeking from the deposit and then enter a repayment request through your online account.

The Depositary application can help to automate much of the end of tenancy process to make life even easier for landlords and their tenants.

  • Understand the deposit dispute procedure

An adjudicator can only adjudicate based on the information they are provided with. They will not contact the parties for follow-up information or supporting evidence and they can only deal with a dispute if both tenant and landlord agree they want us to. When an adjudicator considers a case, they need to know what the claim is about and how much is being claimed for. They find this information in the Dispute Application and the Dispute Response that the landlord and tenant send to TDS. It is worth taking time to complete these properly so that the adjudicator is not in any doubt over what the purpose of the claim is.  

  • What evidence can you use in a dispute?

If there is disagreement over how the deposit is to be divided at the end of the tenancy, a dispute can be raised within the scheme. An impartial adjudicator will decide how the deposit should be divided based on the evidence provided.

In the case of a dispute, you must collate all the evidence you want the adjudicator to consider in support of your claim. Make sure you include the check-in inventory, schedule of condition report and the check-out report. If you are claiming for rent arrears, attach a schedule of what’s been paid and what hasn’t – along with dates for when the rent was due. Without these documents, you may not be able to show that any property damage or rent arrears are the tenant’s responsibility.

Details of previous communications, receipts for work carried out (or quotes for intended work) and dated photographs will all help the adjudicator to assess your claim.

With both TDS deposit protection schemes, you can upload all this evidence easily into the evidence portal.

By following this checklist, you should avoid compliance and deposit dispute issues. If you would like to know more about the tenancy deposit process and how an adjudicator thinks when assessing deposit disputes, sign up to the next live or on-demand workshops at the TDS Academy. Learn more.

Interested in joining the TDS Insured or TDS Custodial schemes? Discover why other landlords chose TDS: Why Switch to TDS?

Sandy Bastin

Sandy Bastin Head of TDS Adjudication Services

Sandy Bastin is a qualified solicitor with many years’ experience practising and specialising in real estate, Sandy joined Tenancy Deposit Scheme (TDS) in 2008 and is now Head of TDS Adjudication Services. Sandy is responsible for recruiting and training TDS adjudicators, providing continued support and mentoring to include quality assurance activity to ensure the high standards expected from TDS adjudication decisions are met.

See all articles by Sandy Bastin