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Protection of Deposits on Private Sector Tenancies

February 26th, 2013

All private sector tenancies in Northern Ireland which commence after 1st April 2013 are required to protect the deposit within 14 days of receipt. The tenants must be provided information on the scheme being used within 28 days of receipt.

There are two types of scheme which have been approved to operate in Northern Ireland. These are the insurance and the custodial scheme.

  • Insurance scheme: The landlord holds the deposit and pays a fee and insurance contribution to the scheme administrator. The landlord returns the deposit to the tenant when it is due. If there is a dispute over the amount of the deposit to be refunded, then the disputed amount is handed over to the administrator who will hold safely until the dispute is resolved.
  • Custodial Scheme: The full deposit is handed over by the landlord to the administrator who holds it in a designated account. At the end of the tenancy the landlord or tenant can apply for repayment. If the amount of refund is in dispute the administrator will hold the funds until the dispute is resolved. This is service is free for both landlord and tenant to use, although interest is kept by the independent administrator.

There are a number of aims of the scheme, including:

  • Protection of deposits
  • Increasing the speed of return of deposit when due
  • Increase professionalism in handling of deposits

Several independent third party schemes have been approved by the Department for Social Development.

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