Tenancy deposit protection (TDP) schemes guarantee that tenants will get their deposits back at the end of the tenancy, if they meet the terms of the tenancy agreement and do not damage the property. Landlords must protect their tenants' deposits using a TDP scheme if they have let the property on an Assured Shorthold Tenancy (AST) which started after 6 April 2007.
Landlords or agents must use one of the three approved TDP schemes to protect tenants' deposits where these conditions apply. If any other scheme is used, deposits are not protected in law. The three approved schemes are:
TDP schemes do not cover holding deposits. Tenants can pay you holding deposits before they have signed a rental agreement. You are not required to protect a holding deposit with a scheme before someone becomes your tenant. However, once they are your tenant the holding deposit becomes a deposit which must be protected with a scheme.
You can pay a deposit to a TDP Scheme as follows:
You'll need to make the physical payment to the TDP Scheme by BACS or cheque.