Tenancy Deposits: The law on protection, deductions and compensation

All UK landlords are legally obliged to protect their tenants’ deposits by placing them in one of three government-approved protection schemes. Yet we hear from people all the time whose deposits were not properly protected and, as a result, have had unfair deductions taken or never got it back at all. 

Despite housing legislation protecting them, thousands of UK tenants never get their deposits back due to the time and effort of complaining or seeking litigation via the courts. 

Here we explain what the law on deposits is, and what routes there are for getting your deposit back if unfair deductions were made or it was never properly protected in the first place. 

So if your current or former landlord failed to protect your deposit correctly and on time, read on – you might be entitled to compensation up to three times the value of the deposit!

Deposits and the law 

When a renter signs an Assured Shorthold Tenancy (AST) agreement, their landlord will almost always request a deposit – which cannot exceed the cost of five weeks’ rent. Once they have received it, landlords have a responsibility to protect the deposit: they have 30 days to place it into one of the three government-approved protection schemes – the Tenancy Deposit Scheme, Deposit Protection Service or MyDeposits.

Tenancy deposit protection legislation under the Housing Act 2004 stipulates that tenants must be given an opportunity to check and sign the ‘prescribed information’ at the start of a tenancy.

“Prescribed information” is a set of specific information about the tenancy, including the amount of deposit received, the address of the property, the name, address and contact information of the relevant tenancy deposit scheme’s administrator and names, addresses and contact details of the landlord and tenants and any third parties who have contributed to the deposit. 

In other words, as well as protecting the deposit, the landlord must also notify their tenant where the deposit is being held and provide a reference number for the account. This ensures that the deposit remains secure throughout the tenancy and that the landlord cannot make any unreasonable deductions – or steal the deposit.

If a tenant’s landlord did not provide the relevant prescribed information – including details of the tenancy deposit scheme – within 30 days of them or their property’s agent receiving the deposit then they will need to return their deposit to them, without deduction, regardless of whether or not it was protected.

Resolver can help you complain about estate agents, letting agents, or a Housing Associations

Deductions

At the end of a tenancy, the landlord can make deductions from the deposit for a number of reasons:  to cover unpaid rent or utility bills, the costs of repairs and cleaning, or replacing missing items.

However, a landlord is only permitted to access the tenant’s deposit and make deductions under specific conditions. And if a deduction will be made, the landlord must inform the tenants beforehand and provide evidence that the deduction is reasonable.

If a tenant believes that a deduction is unfair they are able to try and challenge it: first, by writing to the landlord or letting agent, and then, by asking the deposit scheme in which the deposit is being held to help.

Each deposit protection scheme has a free dispute resolution service. However, in the case that your deposit has not been properly protected or the landlord will not agree to the resolution recommended by the dispute service, you may need to go to court to get back any unfair deductions.

Tenancy deposit claims 

We know that many tenants have their deposit taken without justification – and just don’t have the time or energy to put in the work required to get it back. Going to court is not just time consuming – but can also be extremely costly. 

If your current or former landlord failed to meet their legal obligations when it came to protecting your deposit, you should consider making a claim. We have a recommended provider, Home Rescue, who is offering legal assistance for those with a claim for tenancy deposit. 

Are you eligible for a tenancy deposit claim?

With Home Rescue not only will your legal costs be covered but you could get some serious compensation – up to three times the value of the deposit!

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk.