When you and a tenant enter a traditional security deposit scheme, you are legally required to place the deposit in a government-backed deposit protection scheme (DPS) to ensure the tenant's money is protected and returned after the end of the tenancy.
The money is transferred into a DPS within 30 days of the tenancy beginning. The DPS will contain and provide the following information:
- Your name and contact details
- Address of the rental property
- Deposit amount
- If the payer of the deposit is a third-party (e.g., a parent), their name and contact details
- The DPS's name, contact details, and dispute resolution service
- Information on how the DPS protects the deposit
- Information on how tenants can get the deposit back at the end of the tenancy
- Possible reasons you, the landlord, may deduct money from the security deposit
- What the tenant should do if they are unable to reach you to get your deposit back when the tenancy ends
- What to do if you or the tenant have a conflict regarding the deposit
- If tenants are not sure how their money is protected, they should contact the DPS to verify.
At the end of the tenancy, you and the tenant must meet and come to an agreement on how much of the deposit should be deducted and how much should be returned. Once an agreement is reached, the deposit will be released from the DPS and returned to the tenant. The DPS also protects the tenant in circumstances where they may be unable to reach you after the end of the tenancy or are unable to come to an agreement on how much should be returned.