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When everyone has a home

Housing advice for Northern Ireland

Custodial deposit protection scheme

This page is for landlords operating in Northern Ireland.  You can find advice for tenants elsewhere on our website. Private landlords in Northern Ireland can call Landlord Advice on 028 9024 5640 and choosing option 5. 

Any deposit you receive on or after 1 April 2013 must, by law, be protected in an authorised tenancy deposit protection scheme run by one of 3 approved scheme administrators. As the landlord, you can choose whether to place the deposit with a custodial scheme or use an insurance based scheme. The custodial scheme is free to landlords and tenants.

Protecting the deposit

If you decide to use the custodial scheme you must pass the full tenancy deposit to your chosen scheme administrator within 14 days of receiving the money from the tenant.

Once the deposit is received, the administrator will place it into a designated account where it will be held until it is due to be repaid to either you or the tenant.

Rent in advance differs from a deposit.  You do not need to place any advance rental payments in a tenancy deposit scheme.  Only security deposits which you intend to use as reimbursement against any damages or arrears at the end of the tenancy need to be placed in the scheme.

Asking for a deposit in a form other than money, e.g. goods or property, is an offence.  If you ask your tenant to supply a non-monetary deposit you could be subject to a fixed penalty of up to £500 or, if convicted of an offence, you could be fined up to £2,500.

To comply with the legislation you have to protect the deposit in one of the authorised schemes run by the 3 approved scheme administrators.  Having an estate agent or a company other than MyDeposits, Tenancy Deposit Scheme NI, Capita or the Letting Protection Service will not satisfy your legal obligation and you could face a fixed penalty or prosecution.

Required information

To comply with the scheme and avoid financial penalties you must also supply particular information to both the scheme administrator and the tenant within a specific timeframe.  Failing to supply this information is as serious a breach of the law as failing to register the deposit so make sure you give this information to the necessary people in time.

You must give the following information to the scheme administrator within 14 days of receiving the deposit

  • the amount of the deposit and the full address of the property in question
  • your full name and date of birth
  • your contact details, including your address, telephone number, mobile number and a valid contact email address
  • a correspondence address, which must be in Northern Ireland, if this differs from the address above
  • the name, address and contact details of any agent operating on your behalf
  • confirmation of the tenant’s contact details including contact details of any relevant person who is acting on the tenant’s behalf.

Once they receive the deposit and required information from you the scheme administrator must write to you, and provide

  • the amount of the deposit and the full address of the property in question
  • the tenant’s details, including contact details
  • details of the scheme that the deposit has been placed in
  • details of the dispute resolution mechanism
  • details of how the deposit will be refunded and confirming the circumstances under which you can retain some or all of the deposit
  • a statement to show that the onus is on you to update the scheme administrator immediately of any change to the details you had previously supplied and
  • information on what will happen if the administrator cannot contact you at the end of the tenancy.

The scheme administrator must also supply you with a leaflet which contains information on

  • how the scheme operates
  • the terms and conditions that apply to the scheme
  • the procedures governing the payment, holding and repayment of tenancy deposits and
  • the dispute resolution mechanism.

What you need to give your tenants

You must give the following information to the tenants in the property within 28 days of receiving the deposit

  • the amount of the deposit and the full address of the property in question
  • your full name and date of birth
  • your contact details, including your address, telephone number, mobile number and a valid contact email address
  • a correspondence address, which must be in Northern Ireland, if this differs from the address above
  • the name, address and contact details of any agent operating on your behalf
  • confirmation of the tenant’s contact details including contact details of any relevant person who is acting on the tenant’s behalf
  • details of the scheme in which you’ve placed the deposit including information about how to resolve a dispute
  • details of how the deposit will be refunded and the circumstances under which you can retain some or all of the deposit
  • what will happen if the tenant is not contactable at the end of the tenancy and
  • a copy of the leaflet you were given by the scheme administrator.

You need to certify that the information you’ve given the tenant is correct to the best of your knowledge and you have to give the tenant an opportunity to sign the document to show that the tenant is happy that the information is correct.

End of the tenancy

As soon as is reasonably possible after the tenancy ends you need to apply in writing to the scheme administrator for the return of the deposit.  You should carry out a full property inspection against the inventory you took at the start of the tenancy and base your application on your findings from this inspection.

You need to specify how much money is due to be returned to the tenant and how much should be returned to you.  Remember, the tenant may dispute this so you should make sure that any money you are asking for is reasonable and that you can prove you have in fact suffered a financial loss which you intend to recoup from the deposit.  You should provide proof of any damage caused by the tenant or of arrears which you say have occurred.  Taking a detailed, photographic inventory at the beginning and end of the tenancy will help you prove your case.

On receiving your application for the deposit the administrator will write to the tenant, informing him/her of how you believe the deposit should be dealt with.  The tenant must confirm in writing that he/she agrees or disagrees with your decision.

If there is no dispute the money should be returned in the agreed sums within 5 working days of receiving confirmation that you and the tenant agree on how the deposit should be refunded.

If the tenant does not respond to the scheme administrator within 30 working days the administrator will repay the money which you feel you are entitled to and continue to hold any amount due back to the tenant.

Your tenant is also entitled to make an application to the scheme administrator for the return of the deposit.  However, this application will only be processed if the administrator doesn’t receive an application from you.  If they process the tenant’s application the administrators will write to you to let you know how the tenant believes the deposit will be refunded.  If you do not respond the full deposit will be returned to the tenant.

Disputes

If the tenant decides to use the dispute resolution mechanism to resolve any disagreements over the deposit, you'll have to agree to this.  Once the dispute is resolved the administrator will pay any disputed amount as per outcome of the dispute resolution service.

The tenant can choose not to use the deposit company's dispute service and to try to recover the deposit money through Small Claims Court instead.  However, if he or she wants to use the scheme's dispute service, you have to comply with this request.

The administrator will repay any undisputed money to the agreed party but will hold any disputed amount until the dispute has been resolved.