The law

What is tenancy deposit protection?

Any deposit a tenant pays to the landlord or agent to rent a home in Northern Ireland must be protected with a government authorised scheme within 28 days of receiving it. The landlord or agent must provide the tenant with key information about the protection within 35 days of receiving the deposit. The deposit must be no more than one months rent and by law a landlord must now provide the tenant with a receipt for any payment of cash relating to the tenancy.

This law was put in place to protect:

– the tenant, who is entitled to a full refund for meeting all the terms of their tenancy agreement, and
– the landlord in the event the tenant breaks any of the terms of the tenancy agreement

A tenant can report a landlord to the local council if they do not protect a deposit correctly and/or provide information to the tenant in the specified time. Councils have the power to impose fixed penalties in these cases.

 

What kind of deposits need protecting?

The law applies to all new, renewed or varied tenancy agreements from 1 April 2013.

 

How is a deposit protected?

Firstly, the landlord or agent will need to set up a free mydeposits Northern Ireland account membership using our online portal. Find out more about joining mydeposits Northern Ireland here.

Landlords and agents can choose how they protect deposits:

Insured

  • The landlord or agent holds on to the deposit
  • The landlord or agent pays a fee to protect the deposit
  • The landlord or agent returns the deposit to the tenant when it is due to be refunded

Custodial

  • Free for both the landlord or agent to use
  • The deposit is handed over by the landlord or agent to the scheme to safeguard in a designated account
  • Either the tenant or the landlord or agent can apply for repayment at the end of the tenancy

To protect a deposit the landlord or agent will need to follow the protection process by providing us with the relevant tenancy details.

We will then confirm to the tenant and landlord or agent that the deposit is protected, providing details of the tenancy and the amount protected. The landlord or agent should also provide the tenant with the scheme information leaflet, which provides more information on how the deposit should be returned and what to do if there is a dispute.

 

What are the penalties for not protecting a deposit?

When a council finds a landlord has broken the law over tenancy deposits, they can fine the landlord three times the amount of the deposit.

The council can also prosecute a landlord for breaking the law.  If convicted, a court can fine a landlord up to £20,000.

 

How do you keep deposits safe?

If the deposit is protected in our custodial scheme, we will hold the deposit in a regulated bank, until the tenancy ends and it is due to be repaid. In the event of bank failure, the money is guaranteed safe.

If the deposit is protected in our insured scheme, the landlord or agent pays a protection fee and holds the deposit for the duration of the tenancy. The landlord or agent is responsible for looking after the deposit, but the fee they pay protects the tenant against loss or misappropriation.

 

How is the deposit returned?

All parties are encouraged to discuss the return of the deposit, including any proposed deductions at the end of the tenancy.

Insured

  • The tenant and landlord or agent discuss and agree on how the deposit will be returned, and arrange payment themselves
  • In the event of a dispute, the landlord or agent pays the disputed amount to the scheme to hold until the dispute is resolved

Custodial

  • Either the tenant, landlord or agent can apply to us to release the deposit
  • In the event of a dispute the scheme will hold on to the disputed amount until the dispute is resolved

Find out more about the release process here.

 

Disputes over the return of the deposit

If, after discussing the return of the deposit, all parties are unable to agree on any proposed deductions, they may be able to raise a dispute. We offer a free dispute resolution service, or the case can be heard by the courts.