Tenancy Deposit Scheme

We’ll register your deposit with mydeposits

30 days

Landlord must protect the deposit by using a registered scheme within 30 days of receiving it. Custodial schemes, like the one we use with MyDeposits, require the landlord or lettings agent to transfer the money to be held in a ring fenced client account. Insurance backed schemes allow the landlord to hold the deposit, but the landlord is still required to registered that deposit and issue a tenancy deposit protection certificate.

10 days

Landlord must return a tenant’s deposit within 10 days of both parties agreeing how much to return. However, in the event of a dispute, the approved tenancy deposit schemes are MyDeposits, Tenancy Deposit Scheme and Deposit Protection Scheme and each of them offers an adjudication process if the amount to be deducted by the landlord from the deposit can’t be agreed. Adjudication typically happens within 28 days, and the money will be paid out as determined by the adjudicator.

3x

If the landlord hasn’t used a Tenancy deposit scheme to register the deposit, a court will likely order the landlord to pay the deposit to the tenant or lodge it with a recognised scheme within 14 days. The court may also rule that the landlord should pay compensation of up to 3x the deposit amount to the tenant. So it absolutely is essential that landlords register the deposit within the required timeframe and provide the required information about the scheme being used to avoid penalties.

5 weeks

Following the introduction of the Tenant Fees Act in 2019, the maximum deposit that landlords are allowed to accept in England is 5 weeks’ worth of rent for properties with rent under £50,000 per annum. For properties where rent exceeds this amount, the equivalent of 6 weeks’ rent is permitted. The rules in Scotland are different and the equivalent of 2 months’ rent are permissable as a deposit.

Top Tips

Once the tenancy agreement is signed, we’ll ask tenants to pay their first month’s rent and tenancy deposit. We recommend that this is done through Treehaus, so that we can send the deposit directly to a custodial tenancy deposit scheme and issue the correct paperwork. We use mydeposits, as our nominated scheme. We’ll transfer the funds to my deposits as soon as they arrive in our account, and we’ll set up an account for both the landlord and the tenant.

At the end of the tenancy, the deposit is released by the landlord and tenant agreeing any deductions. Mydeposits will then send the money to each party.

If the landlord and tenant can’t agree on the exact amount of the deposit deductions, then the process will go to arbitration.

Important Notes for Landlords

It is essential that the tenancy deposit is registered with a recognised scheme before the tenancy begins. The penalties for not doing so are severe – up to 3 times the value of the deposit.

Important Notes for Tenants

It's advisable to take care when transferring funds to landlords. Treehaus makes this process easy and secure, holding funds in a ring-fenced client account before sending the funds to a custodial deposit scheme.