A professional letting agent will ensure everything is taken care on your behalf, including taking/ protecting a deposit and undertaking a thorough inventory.

Tenancy Deposit Protection (TDP) explained


As of April 2007, new laws meant landlords needed to change the way they treated deposit money taken from a tenant. Tenancy deposit protection legislation was introduced to protect both the landlord and tenant. It acts as a safeguard should a tenant cause any damage to a property. It also prevents a rogue landlord from handling deposit money unfairly.   

Here, we list the need-to-know facts about tenancy deposit protection (TDP) and look at the alternatives for landlords.

What is Tenancy Deposit Protection legislation?

If you’ve taken a deposit from a tenant, it must be protected using a government-backed tenancy deposit scheme, if your property is rented on an assured shorthold tenancy that started after 6 April 2007.

In England and Wales, this includes three schemes:

There are separate TDP schemes in Scotland and Northern Ireland.

If you don’t rent a property on an assured shorthold tenancy, you can accept valuable items (such as a car or watch) as a deposit instead, but these items won’t be protected by a scheme.

How do I register a deposit?

All three deposit schemes give two options for protecting a deposit: insured or custodial schemes.

With the insurance scheme, you’ll pay a small joining fee, plus an individual fee to protect each deposit. This option means landlords can keep hold of the deposit in a bank account until the tenancy ends, accruing any interest. Once the tenancy finishes, you can deal directly with your tenant to hand the deposit back in full or make any deductions.

The custodial option is free to join and use. The scheme will hold the deposit safely in a secure bank account on behalf of yourself and your tenant. At the end of the tenancy, you will agree on how much will be returned with your tenant and authorise its return.

It’s always best to try and come to an agreement about the return of a deposit, but if you can’t settle with a tenant, both options mean you’ll have access to a free dispute resolution service.

Zero Deposit

Zero Deposit offers an alternative to taking a standard tenancy deposit, providing tenants with added flexibility and choice. It also allows you to market your property to a larger group of applicants.

With this service, your tenants purchase a Zero Deposit Guarantee that provides you with the same cover as a 6-week tenancy deposit. The product reduces the upfront cost of renting for tenants, making your property even more attractive, helping to speed up the rental process and reducing void periods.

Tenants are still fully accountable for looking after your property and making rental payment. Zero Deposits will only make a payment to you if there’s a fair claim at the end of a tenancy. Townends offers this option to our landlords, find out more here.

Recording an inventory

If you choose to take a deposit or your tenant purchases a guarantee, it’s important to complete a professional inventory. This records the property’s condition and means you’re less likely to have to deal with a dispute at the end of the tenancy.

Make sure the inventory includes photographic evidence and records even the smallest mark. This means you’ll only charge the tenant for any damage incurred during their tenancy.

Other Tenancy Deposit Protection options

Taking a deposit isn’t a legal requirement. However if you do take one from a tenant, you must protect it using one of the government-authorised Tenancy Deposit Protection schemes. Alternatively, you can opt for a Zero Deposit Guarantee. However, there are a few other options open to landlords:

Guarantors – asking for a guarantor can be effective irrespective of the credit status of the applicant. However this must be done properly to avoid invalidating the agreement

Rent in advance – as long as it’s a genuine rent payment (i.e. none is returnable). This can reduce the risk of abandonment and non-payment

Local authority bonds – if the tenant qualifies some local authorities or charities offer bonds as an alternative to deposits

Not taking a deposit – landlords may choose to simply take a higher rent and accept more risk.

Taking care of your Tenancy Deposit Protection

A professional letting agent will ensure everything is taken care on your behalf, including taking/ protecting a deposit and undertaking a thorough inventory.

Contact your local Townends branch to find out more about our expert landlord services today.

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