Glossary · UK
What is Tenancy Deposit Scheme?
A government-approved scheme in England that landlords must use to protect a tenant's deposit within 30 days of receiving it, with tenants able to claim up to three times the deposit if the rules are broken.
Full Definition
Since April 2007, landlords in England and Wales who take a deposit for an assured shorthold tenancy (AST) must protect it in one of three government-approved tenancy deposit protection (TDP) schemes within 30 days of receiving the money. The three approved schemes are: the Deposit Protection Service (DPS), MyDeposits and the Tenancy Deposit Scheme (TDS). Each offers either a custodial model (the scheme holds the money) or an insurance-backed model (the landlord holds the money but pays a premium to insure it). Within 30 days of receiving the deposit, the landlord must also provide the tenant with "prescribed information" about where the deposit is protected and how to apply for its return -- this is a separate requirement from simply registering the deposit. From June 2019, deposits on tenancies in England are capped at five weeks' rent where the annual rent is under £50,000, or six weeks' rent for tenancies above £50,000. If a landlord fails to protect the deposit or provide prescribed information on time, the tenant can apply to court and receive compensation of between one and three times the deposit amount, even if the landlord later remedies the breach. The landlord is also prevented from serving a valid Section 21 notice until the deposit is protected.