Chat with us, powered by LiveChat

The Law

It's normal practice for a landlord or letting agent to take a deposit from their tenant as security should the tenant not meet their obligations in connection with a tenancy agreement.

The legislation is designed to safeguard the tenant's deposit and ensure they get it back at the end of the tenancy, provided they have met the terms of their agreement. Both landlord or agent and the tenant have access to a free and impartial dispute resolution mechanism if they are unable to agree how much deposit should be returned at the end of the tenancy.

Landlords and agents must:

  1. Protect the tenant's deposit with a government approved tenancy deposit scheme within 14 days of receiving the deposit from the tenant
  2. And then provide the tenant with key information about the protection within 28 days from receipt of the deposit.

Penalties for landlords and agents who fail to comply

A tenant can report a landlord to the local council if they fail to submit deposits to an approved scheme and/or provide information to the tenant within the specified time limits. Councils have the power to issue fixed penalties in these cases.

What is a tenancy deposit scheme?

A tenancy deposit scheme is an independent third party that has been approved by the Department for Communities (DfC) to protect tenant's deposits.

mydeposits Northern Ireland is a government approved scheme. 

Landlords and agents have a choice of how they protect deposits; insurance or custodial deposit based protection.

Insurance Protection

  • The landlord/agent holds on to the deposit
  • Pays a fee to protect the deposit
  • The landlord/agent returns the deposit to the tenant when it is due to be refunded
  • In the case where there is a dispute, the landlord/agent passes the disputed amount to the scheme to safeguard until the dispute is resolved.

Custodial Protection

  • Free for both the landlord/agent to use
  • The deposit is handed over by the landlord/agent to the scheme to safeguard in a designated account
  • Either the tenant or the landlord/agent can apply for repayment at the end of the tenancy
  • In the event of a dispute the scheme administrator will hold on to the disputed amount until the dispute is resolved.

Deadlines for protection

The landlord/agent must protect the deposit within 14 days from receipt from the tenant.

The landlord/agent must also pass the Prescribed Information (key information about the protection and scheme) to the tenant within 28 days from receipt of the deposit.

Why has the tenancy deposit schemes legislation been introduced?

There are many benefits to both the landlord and the tenant with the introduction of the tenancy deposit schemes legislation such as:

  • Tenancy deposits are protected by an independent third party
  • This helps prevent deposits from being unfairly withheld by the landlords or letting agents at the end of the tenancy
  • Where a landlord and tenant agree about the return of the deposit it must be returned within five working days
  • Every approved scheme provides an independent dispute resolution service. This is a free service to resolve disagreements over the return of deposit as an alternative to taking legal action through the courts.

Improved professionalism of the private rented sector

The Northern Ireland executive expects the introduction of tenancy deposit scheme legislation to raise standards in relation to management of deposits.