tenants deposit

Why Landlords Must Register the Tenants Deposit

Why Landlords Must Register the Tenants Deposit

One of the main requirements for all tenants is that they pay a deposit at the start of their contract. As a landlord, you use this as a safety buffer in case they break the terms of your tenancy agreement or cause damages to your property.

If they behave well and keep your property in the same condition, then the full deposit is paid back at the end of their lease. It’s a simple concept, but there is one vital thing that all landlords need to be aware of.


As you may be able to tell from the title, we’re talking about registering the tenant’s deposit. It’s an essential requirement for all UK landlords, and you need to register it in either The Deposit Protection Service or the Tenancy Deposit Protection Scheme.

Below, we’ll talk about the specific legal requirements, any penalties you get for failing to register a tenants deposit, and provide some extra info on both schemes.


The Legal Requirements

Legally speaking, every landlord or letting agent needs to put their tenant’s deposit in a government-backed tenancy deposit scheme. This is required for all assured shorthold tenancies that began after April 2007.

In essence, this is done to protect the tenant’s deposit and ensure that you’re going to give it back to them if they meet the terms of your tenancy agreement, don’t damage your property, and pay their rent/bills on time.


As the landlord, you have within 30 days of receiving the deposit to put it in one of the schemes mentioned earlier. You’re also legally bound to give your tenants the ‘Prescribed Information,’ such as the address of their property, the deposit they’ve paid, how you’re protecting the deposit, the details of the deposit protection scheme you’re using, and a few more additional things.


When the tenancy comes to an end, you need to give the deposit back within 10 days – provided the tenant hasn’t broken any agreement rules, damaged the property, or failed to pay rent.


What Happens If You Don’t Register A Deposit?

There are two main penalties that you face if you fail to register a holding deposit and keep it protected. First of all, if you don’t register the deposit at all within the 30 days, then you will be ordered to pay a financial penalty. This can be anywhere between one or three times the deposit amount, and it will go directly to the tenant.

You may also be ordered to return the deposit as well, and you will be unable to serve a Section 21 notice until it’s returned. Interestingly, your tenants have 6 years to file a claim against you if they find out their deposit wasn’t registered or protected.


Now, if you register the deposit but fail to give all the right information to your tenant within the 30 days, then you lose some of your Section 21 rights. As the landlord, you can’t serve this notice until you’ve given out all of the essential information to the tenant. Plus, there could be another financial penalty as well.


Tenancy Deposit Scheme

The first scheme you could use is the TDS, which is totally free for you to join, and you can set everything up online via their website. It’s a straightforward scheme to use, all you have to do is register online, then register the deposit, and pay a one-off protection fee.

This fee covers the deposit money throughout the tenancy, and it differs depending on the value of the deposits you’re covering.


As of writing this, the current rates are £16 for deposits up to £500, and £23 for deposits over £500. The beauty of this scheme is that they email you with a document providing all the Prescribed Information that you need to give to your tenants within the all-important 30 days. All you have to do is fill in the form and send it to your tenants.


Deposit Protection Service

The other scheme you could consider is the DPS, which offers two different choices. Firstly, there’s a custodial service that’s entirely free and means they hold the tenant’s deposit during their tenancy, then pay it back when they leave.


Then, there the Insured Scheme, which protects their deposit for a small fee – and puts you in charge of repaying it. You must create an account, then pay a fee of £15 (for deposits under £500) or £22.50 (for deposits over £500).



To summarise, you’re legally required to register a tenants deposit or run the risk of being fined three times as much as the deposit amount! The best way to ensure you do this is by using either of the schemes mentioned above. They’re government backed – and make sure you also send the Prescribed Information to your tenants as well!


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Mariana Woll About the author
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