England Landlord Guidance

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3.10 Deposits And Tenancy Deposit Schemes

Many landlords take a deposit from tenants to hold for the duration of the tenancy. When the tenant moves out this is returned to the tenant less any deductions permitted: normally for damage (in excess of fair wear and tear), additional cleaning and to cover any outstanding rent. Note that a deposit (or part of it) can only be withheld if it is stipulated within the contract what the deposit is being held against.

Because a small minority of landlords wrongly withheld or did not return deposits the Government introduced in the Housing Act 2004 a statutory deposit protection scheme. This safeguards all deposits taken under an assured shorthold tenancy after 6 April 2007 or assured shorthold tenancies that have been renewed since that date. In certain circumstances, since amendments made by the Deregulation Act 2015, all deposits for assured shorthold tenancies should be protected in order to serve a section 21 notice, even deposits taken before 6 April 2007. Deposits relating to other types of tenancies are not covered.