You must return the tenant's deposit within 10 days of you both agreeing how much you will get back.
If you are in a dispute with your tenant, your deposit will be protected in the tenancy deposit scheme until the issue is sorted out.
In England and Wales deposits can be registered with:
- Deposit Protection Service - learn more on the deposit protection service website
- MyDeposits - learn more on the MyDeposits website
You can accept valuable items, such as a car or watch, as a deposit instead of money, but these need not be protected by a scheme.
You should put the tenant's deposit in a scheme within 30 days of getting it.
At the end of your tenancy
Holding deposits
A holding deposit is money paid to hold a property before an agreement is signed. You do not have to protect a holding deposit but once you have a tenant, the holding deposit becomes a deposit, which you must protect.
Deposits made by a third party
You must use a tenancy deposit scheme even if your deposit is paid by someone else, such as a rent deposit scheme or the tenant's parents.
Information landlords must give tenants
Once you have received the deposit, you have 30 days to inform your tenant of the following:
- the address of the rented property
- how much deposit you have received
- how the deposit is protected
- the name and contact details of the tenancy deposit protection scheme and its dispute resolution service
- your, or your letting agency's, name and contact details
- the name and contact details of any third party that has paid the deposit
- why you would keep some or all the deposit
- how the tenant can apply to get the deposit back
- what to do if the tenant cannot get hold of you at the end of the tenancy
- what to do if there is a dispute over the deposit
If you fail to protect your deposit
Your tenant can apply to the county court.
If the court finds you have not protected the deposit, it can order you to either:
- repay it
- pay it into a custodial scheme's bank account within 14 days
The court may also order you to pay up to 3 times the deposit within 14 days of making the order.
When the tenancy ends
The court may decide that you will not have to leave the property when the tenancy ends if your landlord has not used a tenancy deposit scheme when they should have.
If there is a dispute over a deposit
Your tenancy deposit protection scheme offers a free dispute resolution service if you disagree with your tenant about how much deposit should be returned.
You do not have to use the service but if you do, both you and the tenant have to agree to it. You will both be asked to provide evidence, and the decision made about your deposit will be final.