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Deposit Protection Scheme

From the 1 April 2013 all landlords and letting agents in Northern Ireland must protect tenancy deposits with a licenced scheme. Landlords and agents can protect deposits using insurance or custodial based protection options. We use TDS Northern Ireland to protect deposits.


The Law


It’s normal practice for a landlord or letting agent to take a deposit from their tenant as security should the tenant not meet their obligations in connection with a tenancy agreement. The new legislation is designed to safeguard the tenant’s deposit and ensure they get it back at the end of the tenancy, provided they have met the terms of their agreement. Both landlord or agent and the tenant have access to a free and impartial dispute resolution mechanism if they are unable to agree how much deposit should be returned at the end of the tenancy.


Landlords and agents must:


Protect the tenant’s deposit with a government licenced tenancy deposit scheme within 14 days of receiving the deposit from the tenant. And then provide the tenant with key information about the protection within 28 days from receipt of the deposit. Penalties for landlords and agents who fail to comply. Councils have the power to issue fixed penalties in these cases.


What is a tenancy deposit scheme?


A tenancy deposit scheme is an independent third party that has been approved by the Department for Social Development (DSD) to protect tenant’s deposits. TDS Northern Ireland is a government licenced scheme. Landlords and agents have a choice of how they protect deposits; insurance or custodial deposit based protection.


Insurance Protection

  • The landlord/agent holds on to the deposit
  • Pays a fee to protect the deposit.
  • The landlord/agent returns the deposit to the tenant when it is due to be refunded.
  • In the case where there is a dispute, the landlord/agent passes the disputed amount to the scheme to safeguard until the dispute is resolved.


Custodial Protection

  • Free for both the landlord/agent to use.
  • The deposit is handed over by the landlord/agent to the scheme to safeguard in a designated account
  • Either the tenant or the landlord/agent can apply for repayment at the end of the tenancy.
  • In the event of a dispute the scheme administrator will hold on to the disputed amount until the dispute is resolved.


Deadlines for protection


The landlord/agent must protect the deposit within 14 days from receipt from the tenant. The landlord/agent must also pass The Registration 12 Information (key information about the protection and scheme) to the tenant within 28 days from receipt of the deposit.


Why is The Tenancy Deposit Schemes Legislation being introduced?


There are many benefits to both the landlord and the tenant with the introduction of the tenancy deposit schemes legislation such as: Tenancy deposits will be protected by an independent third party. This will prevent deposits from being unfairly withheld by the landlords or letting agents at the end of the tenancy. Where a landlord and tenant agree about the return of the deposit it must be returned within 10 working days. Every approved scheme will provide an independent dispute resolution service. This is a free service to resolve disagreements over the return of deposit as an alternative to taking legal action through the courts.