Which Tenancy deposit scheme to use – DPS, TDS, Mydeposits or Zero Deposit?

What are the three tenancy deposit schemes?

There are three government-backed deposit protection schemes: Deposit Protection Service (DPS), MyDeposits and Tenancy Deposit Scheme (TDS). The deposit legislation applies to all residential properties let on an assured shorthold tenancy after 6th of April 2007.

How does the deposit custodial scheme work?

The custodial scheme is where the landlord transfers the deposit money to the Government-backed deposit scheme. The scheme is funded, by the interest earned from deposit monies held in the scheme. The custodial scheme is free to use. 

What is an Insurance based deposit scheme?

The Insurance-based scheme charges a protection fee, and the landlord or the letting agent holds the deposit money for the duration of the tenancy.

What is the deposit prescribed information?

The Prescribed Information is specific information relating to a tenancy, which a landlord is legally required to provide to the tenant. The landlord must serve the tenant with the Deposit Prescribed Information within 30 days of the agent or landlord receiving the deposit money. The prescribed information must contain the following information:

  1. The amount of the deposit

    2. The address of the property

    3. The name, address and contact details of the administrator of the tenancy deposit scheme with which the deposit is held. 

    4. The name, address and contact details of the landlord and tenants. It should also contain information about a third party who may have contributed to the deposit.

Prescribed information for custodial and Insurance backed schemes are distinctly different and vary depending on the scheme provider used.

Deposit Prescribed Information is only available from the scheme provider, once you have bought the product. The Deposit Prescribed Information is specific to the product you have chosen; you cannot use any Prescribed information.  

The Custodial terms and conditions?

The Custodial scheme terms are comprehensive, and like all T&C’s they change from time to time. You can access them from the scheme providers website.

How to deal with the deposit at the end of the tenancy?

The landlord needs to agree the tenant can have their full deposit back.

The landlord will need to start the repayment process: Scheme provider will ask the tenant to confirm the landlord’s instruction and the tenant to provide the scheme provider with bank details.

If the tenants started the repayment process: The landlord needs to confirm they are happy with the request. You can do this through your online account. The scheme provider will pay the deposit back to the tenant straight away.

How to claim deductions from the deposit?

Deductions to cover things like damage, unpaid rent or cleaning are common. In most cases letting agents and tenants will agree, how much money can be taken from the deposit.

How to claim deductions, what will the scheme do? 

They will contact the tenant and ask them to agree or disagree with the landlords claim. If the tenant agrees, that is good. The scheme will pay the deposit money as per the tenant’s instructions. If the tenant disagrees, the scheme will ask the tenant to tell them why and what they are willing to pay. The scheme provider will then, in turn, contact the landlord and ask if they are happy with what the tenant has agreed to pay. If both parties have agreed on a settlement, the case will be closed. If the parties are not satisfied, the scheme free Dispute Resolution Service can help.

I can’t reach an agreement with my tenants.

If the parties cannot come to a settlement, how much of the deposit should be paid, they should try to settle the matter amicably. The alternatives are to use the Dispute Resolution Process, or to pursue the case through the courts.

How to contact my tenants?

If the landlord cannot contact the tenant, they should still commence with the repayment process in the same way. The Scheme provider will attempt to contact the tenant using the details they hold for them. If they don’t respond, the landlord can provide a Statutory Declaration to instruct the scheme to release the deposit. As part of this process, the provider will attempt to contact the tenants again.

Tenancy deposit scheme costs

There are four options for landlords that are available when selecting a suitable tenant deposit scheme. There are three government-backed schemes. There is the Zero deposit option too.  

The cost varies and depends on which option you have chosen.

What tenancy deposit schemes are in Scotland

There are three tenancy deposit scheme providers to choose from in Scotland:

Tenancy deposit scheme TDS contact number

By phone: Insured (landlord/agent holds the deposit)  0300 037 1000 

Custodial (TDS hold the deposit)  0300 037 1001

DPS email address?

The PDS dedicated helpline is 0330 303 0030. there customer service centre operates Monday to Friday from 08:00 to 18:30. Their email is: [email protected]

TDS is my deposit protected?

You can check this online using the TDS website. 

You will need your Deposit Protection Certificate code or deposit account number. Should you not have this, then submit the information about your tenancy.

What is a Bond scheme?

When referring to the bond scheme, the word “bond” generally relates to the Tenancy Deposit Schemes. 

How do I get my tenancy deposit back?

Tenants frequently ask how do I get my deposit back from the scheme or the landlord. You will need to contact your landlord, at the end of your tenancy, and ask them for your deposit. If a letting agent manages your home, you will need to contact them to get your deposit back.

Before vacating, make sure you have evidence of the condition of the property. Evidence may come in handy, in case your landlord disagree on how much deposit you should get back.

If possible, you should:

  • Take photos of the property to show the condition of the property, before you left.
  • Obtain a check-out inventory and ask your landlord to sign it.

What money can my landlord take from my deposit?

Money, your landlord, might take from your deposit for example are:

  • Rent arrears
  • Damage to the property – this could be like a spill on the carpet or a mark on the wall. 
  • Broken some items from the inventory.

What money my landlord cannot take from my deposit?

Money, your landlord, should not take from your deposit

are, for example:

  • Replace a worn carpet with a new one, if it has worn out, with regular usage over time.
  • Damage caused by a repair the landlord did not fix when they should have.
  • The cost to decorate an entire room, due to a few scuff marks on a wall. 

Your landlord can’t take money from your deposit for ‘reasonable wear and tear’.

What if the local council paid the deposit?

It is likely you, will not get any money back from your deposit if the council paid it on your behalf. If it was a guaranteed bond scheme, then you will not be entitled to the deposit.

If the landlord takes money from the deposit for any damages or rent arrears, your council will have to pay it. The council will demand you pay them the money back.

You should check with your landlord, on any deductions made if you disagree with them.

Your landlord can’t take unreasonable amounts of money from your deposit. 

Do landlords have to take a deposit?

No, it is down to the landlord. Some landlords to avoid contention will not to take a deposit. An increasing number of landlords are using Zero deposit option instead.  

What is a Zero Deposit?

A Zero Deposit Guarantee replaces the traditional security deposit. The Zero Deposit option is faster and more affordable for tenants and means that tenants can move into the home much quicker. Tenants do not need to pay upfront one months rent and a security deposit.

How does Zero Deposit work?

Zero Deposit alternative is simple, quick and you only need to pay, the equivalent to one week’s rent, plus a yearly £26 admin fee. 

The British Landlords Association members have access to the DPS and Zero deposit products as part of there membership.

If you are not a member of the British Landlords Association, join us now. Membership is Free.

Author: Marc Attwater

Date: 24th of March 2020

Other Deposit related topics:

How to defend a tenants claim for tenancy deposit Scheme breach

How to reduce compensation to the tenant for non-compliance


This post is for general use only and is not intended to offer legal, tax, or investment advice; it may be out of date, incorrect, or maybe a guest post. You are required to seek legal advice from a solicitor before acting on anything written hereinabove.

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