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Tenancy Deposit Scheme Regulations

What is Tenancy Deposit Protection?

A tenancy deposit is a sum of money that a landlord may ask a tenant to pay at the start of a tenancy.  This deposit is held as a security against the tenant not meeting their obligations in connection with the tenancy agreement.  The landlord is legally required to protect the deposit by insuring it with a third-party tenancy deposit scheme.

There are many benefits to this:

  • Tenancy deposits are protected by a third party:  The deposit is now protected and cannot be unfairly withheld at the end of a tenancy.
  • Quick repayment of deposits: Where a landlord and tenant agree about the deposit, it must be returned within 5 working days.
  • Free access to independent resolution service:  Every approved scheme will provide a free service to resolve disagreements over the return of a deposit – an alternative to taking legal action through the courts.
  • Provision of information:  Landlords must give the tenant key information about the tenancy, the deposit and the scheme that safeguards the deposit.  Schemes will also provide information regarding the protection of deposits.
  • Sanctions for non-compliance:  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.  Councils will have the power to issue fixed penalties.
  • Improved professionalism in the private rented sector:  The introduction of the Tenancy Deposit Scheme will raise standards in relation to the management of deposits.

There are two types of scheme which have been approved to operate in Northern Ireland:

The Custodial Scheme


This is free for both the landlord and tenant to use.  In this case, the deposit is handed over by the landlord to a scheme administrator for safe keeping in a designated account.  At the end of the tenancy, the landlord or the tenant can apply for repayment of the deposit.  In the event of a dispute, the administrator will hold onto the disputed amount until the dispute is resolved.

The Insurance Scheme


In this case, GOC Estate Agents / the landlord holds onto the deposit and pays a fee to their chosen scheme administrator.  GOC Estate Agents / the landlord refunds the deposit to the tenant when it is due to be refunded.  Where there is a dispute, GOC Estate Agents / the landlord hands the disputed amount to the administrator to safeguard until the dispute is resolved.