Tenancy deposit scheme

What is a tenancy deposit scheme?

A tenancy deposit is money which your landlord may ask you to pay when you start to rent a house, as protection against damages to the property or for unpaid rent. It must be protected in a Tenancy Deposit Scheme.

Deposits for tenancies outside Northern Ireland or deposits paid before 1 April 2013 do not have to be protected.

Any deposit for a private tenancy taken by a landlord or agent must be protected in an approved tenancy deposit scheme. 

The deposit must be secured in an approved scheme within 14 days and a tenant must be informed that their deposit has been secured within 28 days. All the approved schemes are free to use.

If they do not protect the deposit, or comply with the requirements of the deposit scheme, they could face a fine (up to three times the value of the deposit) or be prosecuted in court, where they could be fined up to £20,000.

The scheme also makes it illegal for a landlord or agent to take a deposit in any other form than money – all deposits must be monetary. The fine for taking a deposit in any other form can be up to £500 or a fine in court of up to £2,500.

Types of schemes

There are two types of deposit scheme:

• Custodial scheme: this is where the landlord protects the entire tenant's deposit in the scheme until it becomes due at the end of the tenancy.
• Insurance scheme: this is where the landlord can hold the deposit, on the condition they pay a fee or an insurance premium, or both, to the scheme to protect the deposit, until it becomes due at the end of the tenancy.

Who runs the scheme?

The Department for Communities appointed three scheme administrators to operate the schemes. Each organisation provide both custodial and insurance schemes.

• My Deposits
• The Dispute Service NI
• Letting Protection Service Northern Ireland

Enforcement

We enforce the scheme for all private rentals in the Belfast City Council area.

If we find a landlord or agent holding a deposit which has not been secured in one of the three approved schemes we can issue them with a fixed penalty that is three times the value of the deposit taken.

The fixed penalty for taking a deposit other than money will be determined by the council and cannot exceed £500.

You can report a landlord or agent for not complying by calling 028 9027 0428 or emailing envhealth@belfastcity.gov.uk

There’s more information on nidirect website.