Coventry Law Centre : Housing advice : Information leaflets : Returnable deposits

Return to housing information leaflets index

Tenancy deposits

Seeking Advice & Assistance

This leaflet is intended to give general guidance only and is not to be treated as giving specific advice in respect of particular cases.

Coventry Law Centre
The Bridge
Broadgate
Coventry CV1 1NG

Tel: 024 76223053

Tenancy Deposit Schemes

From 6 April 2007, when a tenancy deposit is paid in respect of an assured shorthold tenancy, the landlord or letting agent must protect your deposit by placing it in a Government backed tenancy deposit scheme.

The Government has introduced the schemes to protect tenancy deposits and provide a fairer system for settling disputes about the return of a deposit at the end of the tenancy. Before the introduction of these schemes, if a landlord kept all or part of your deposit it could be difficult to get it back. With the new schemes, an independent service helps to resolve disputes about deposits at the end of a tenancy. This service is free for tenants.

You will be protected by the scheme if you are:

Renting a home from a private landlord or letting agent and the tenancy began on or after 6 April 2007 and
Your tenancy is an assured shorthold tenancy (this applies to most new private tenancies), and
You have paid a deposit (not the same as rent in advance)

The above applies whether it is the tenant, or someone else such as a parent, who actually pays the deposit.

After you have paid the deposit, the landlord or agent must protect your deposit using a tenancy deposit scheme. There are two types of scheme available:

A custodial scheme - the landlord or agent pays the deposit to the scheme and it is kept it until the end of your tenancy.
An insurance scheme - the landlord or agent keeps the deposit but pays insurance premiums to the scheme. This means that the deposit is insured if there is any dispute and will be returned to the tenant unless the landlord can show it should not be. The insurance scheme can charge fees to landlords for membership and can require contributions towards the costs of insurance.

It will be up to your landlord or agent to decide which scheme to use, They must provide certain information to you within 14 days of the day when you paid your deposit. This information includes:

The contact details of the landlord or agent
Full details of the scheme being used and how to contact it
Information about the purpose of a tenancy deposit
What you can do if there is a dispute about the deposit
How you can apply to get the deposit back at the end of the tenancy

When you move into a property, it is a good idea to draw up an inventory. An inventory is a detailed list of the contents and condition of the property and any items provided with it, such as furniture or equipment. Having an inventory can help you resolve disputes at the end of your tenancy about whether you have caused any damage to the property or whether any items are missing. It is in your own interests to take care of the property you are renting.

You should ensure that you have a receipt for any payments made to the landlord particularly if payments are made in cash rather than by standing order or cheque.

If your landlord or agent has not protected your deposit and provided the required information within 14 days, then you can apply to the County Court for an order that the landlord or agent should pay the deposit back to you, or protect it in one of the deposit protection schemes. The Court can also order that the landlord or agent pay you compensation equivalent to three times the value of the deposit you paid. The landlord or agent must carry out the order of the Court within 14 days of the Order being made.

If your landlord or agent hasn’t protected your deposit and provided the required information within 14 days there are restrictions on the grounds on which the landlord can regain possession of the property you are renting. Usually landlords can gain possession of assured shorthold tenancies by giving you a minimum of 2 month’s notice and then getting a court order for possession without having to show a reason. This is known as the ‘shorthold ground’. However, if your landlord or agent hasn’t protected your deposit and provided the required information within 14 days, then they cannot use the shorthold ground to evict you.

When you leave the tenancy, if you and your landlord or agent agree on how much of the deposit is to be returned to you, you should get it back within 10 days of reaching agreement.

If your deposit was held in a custodial scheme, you will also receive some interest on the deposit. The custodial scheme will repay tenants direct, either by cheque or by electronic transfer. Deposits held in the insurance-based schemes will not pass on any interest to the tenant.

Your landlord or agent is only entitled to keep all or part of your deposit if they can show that they have lost out financially because of your actions, for example, you have caused damage to the property or you owe rent. You should ask your landlord or agent for a breakdown of the specific costs that are being taken out of the deposit. Your landlord or agent cannot keep your deposit to cover putting right normal wear and tear.

If you don’t agree that your landlord or agent should have kept all or part of your deposit or you disagree with some of the costs that they have taken out of it, then the tenancy deposit protection scheme your landlord or agent has used will offer a free service to help resolve disputes. Information on what you need to do if there is a dispute will be contained in the information your landlord or agent will have given you at the start of your tenancy. Each scheme will contain an Alternative Dispute Resolution (ADR) service. When a dispute occurs, and if you and your landlord both agree to use the service, you will have to agree to accept it’s decision and will not be able to apply to the courts. If you or your landlord does not agree to use the ADR service then the dispute will usually go to the county court.

Visit the Directgov website for guidance booklets for both landlords and tenants. These are available in a range of languages, including Welsh, Turkish, Punjabi, Chinese, Bengali, Urdu, Gujarati and Polish. Alternatively, you can also get more general information about the tenancy deposit protection scheme from the Communities and Local Government website.

If you paid a tenancy deposit before 6 April 2007, then you will not be protected by the scheme unless your landlord or agent renews your tenancy on or after 6 April 2007, and gives you a new agreement. You will need to write to the landlord asking for your deposit to be returned and, if it is not returned, your only recourse is to issue proceedings in the small claims track at the County Court.

What will happen once a Summons is issued?

Your landlord will be given the opportunity to defend the claim. Assuming that he does then you will probably be required by the Court to complete some further forms and the case will eventually be listed for a hearing. Usually, cases involving claims of less than £5,000 are heard in the Small Claims Court and the procedure is relatively informal. You should not need a lawyer although you are free to employ one if you wish but Community Legal Services Funding will not normally be available to pay one for representing you although such funding may be available for preliminary advice.

Counterclaims

You should be aware that if you issue a Summons against an individual he/she is always free to issue a Counterclaim against you as well as filing a Defence. You should therefore, always think carefully before issuing proceedings and if you feel there is a risk of any Counterclaim being brought against you, you ought to obtain legal advice. Examples of a Counterclaim in this situation might be where the landlord claims that you have caused damage to his property or where he contends that there are rent arrears.