If, as a landlord, you don’t register your tenancy deposit you could face legal action, penalty fees and even become unable to evict tenants.
Registering your tenancy deposit in an approved scheme is one of a landlord’s legal responsibilities and failing to do so can land them in legal and financial trouble. Luckily, it’s relatively quick and easy to do.
If you’re a landlord in need of some guidance on your responsibilities or other property management services, we can help! At J Property Management London, we help landlords across London and the rest of the UK stay compliant and keep their rental properties profitable. Get in touch today to see how we can help!
What Is A Tenancy Deposit?
The tenancy deposit scheme was introduced in the UK in 2007 to protect tenant deposits and support tenants’ rights. Under the scheme, tenants must get their deposit back as long as they have:
- Followed the terms and conditions of the tenancy agreement
- Not caused any damage to the property
- Met all payments on time for rent and bills.
They were introduced to protect the tenant from unfair landlord practices and being ripped off. As part of the tenancy deposit scheme, landlords can also use a free alternative dispute resolution service if there are any financial disagreements with tenants at the end of the tenancy.
What Are The Types Of Tenancy Deposit Schemes?
There are three different types of government-approved tenancy deposit schemes in England and Wales and the landlord can choose which one they prefer.
- The Deposit Protection Service (DPS)
- My Deposits
- The Tenancy Deposit Scheme (TDS)
All three have “custodial” options available (allowing you to hold the deposit for free) or “insured” options, where you pay to insure the deposit.
If you’re a landlord in Scotland or Northern Ireland, there are separate tenancy deposit schemes available.
Once you’ve decided, you need to let your tenant know which scheme you’ve chosen and how their deposit will be managed.
What Is The Landlord’s Responsibility For The Tenancy Deposit?
Landlords have a few responsibilities when it comes to the tenancy deposit.
Choose A Government-Approved Scheme
All landlords in England in Wales that have taken a tenancy deposit must protect it under one of the 3 government-approved schemes.
Secure The Tenancy Deposit
Landlords must secure the deposit within 30 days of receiving it.
Notify The Tenant
The landlord must legally provide information about which scheme they’ve chosen to protect the tenancy deposit and how it will be managed – also within 30 days.
Deregister The Tenancy Deposit
It’s also the responsibility of the landlord to deregister the deposit at the end of the tenancy.
It is always the landlord’s responsibility to make sure that the deposit is properly protected, deadlines are met and that they are being compliant.
How Can You Register Your Tenancy Deposit?
Once you’ve chosen your preferred scheme, you can register your tenancy deposit through the scheme’s website in a few, short steps.
You can choose a custodial (free) scheme or choose to pay a small fee to insure the deposit while you hold onto it yourself. If you choose the latter, you’ll be responsible for repaying your tenant personally at the end of the tenancy. The custodial option means that the scheme hangs on to the money and repays the tenant once the tenancy is finished.
After you’ve completed registration, your chosen tenancy deposit scheme will send you a certificate to sign and send to your tenant. It’s your responsibility to share all relevant information about your chosen scheme with the tenant so that they know how their tenancy deposit is being protected.
What Happens If Landlords Don’t Register The Tenancy Deposit?
There are a few things that might happen if landlords don’t register the tenancy deposit.
Repayment
If landlords fail to comply with the tenancy deposit scheme, they may have to repay the original deposit to each tenant and may need to pay up to 3 times the original deposit for each tenancy.
Legal Action
In the case that tenants discover that their tenancy deposit has not been registered, they can take landlords to county court which can be time-consuming, stressful and expensive.
No Eviction Rights
If landlords haven’t followed their tenancy deposit obligations, they may lose their rights to evict tenants meaning that tenants can continue to stay in their property after the tenancy ends.
What Should Tenants Do If Their Tenancy Deposit Isn’t Registered?
If tenants discover that their tenancy deposit isn’t registered they should:
Contact The Landlord
The first step for tenants should always be to content the landlord and request repayment or come up with a solution.
Get Professional Advice
Tenants can get free advice from Shelter or Citizens Advice about what the next steps should be in their specific case.
Start Court Action
If necessary, tenants may decide to take court action. They’ll need to first apply to their local county court and potentially escalate to small claims court.
Stay Compliant As A Landlord With J Property Management
Correctly registering tenancy deposits is a fairly easy and straightforward process but failing to do so can lead to big problems. If you’re unsure about your landlord responsibilities or need an extra hand with some of your property management tasks, get in touch today! At J Property Management, we’re dedicated to helping landlords stay on top of their obligations, avoid unnecessary fees and get the most out of their property investment.
Contact us today to see how we can help!
