Deposits when a letting agency closes or is replaced

We're closing our lettings arm entirely — what happens to the deposits we're currently holding as the registered protecting party?

If your lettings arm closes, the deposits you currently hold must remain protected under Housing Act 2004 ss.212–215 and you must either return them to tenants or transfer the protection/registration to another authorised party so the tenancy’s deposit can be repaid when it ends; undisputed amounts are normally repaid within 10 days of agreement and custodial refunds are commonly released within 5 working days.

Explanation — in England the law requires that a deposit taken for an assured shorthold tenancy remain protected in a Government‑authorised scheme for the tenancy’s duration and be available to return at the end of the tenancy. That duty does not vanish if your company stops trading: either the money stays in a custodial TDS account (so TDS holds the funds and tenants can request repayment through the scheme) or, for insured protections, the agent/landlord who holds the money must ensure it is returned at tenancy end or handed to a replacement protected party. There is no dedicated, publicly published TDS “agency‑closure” playbook on tenancydepositscheme.com explaining step‑by‑step mechanics; the statutory obligation and TDS materials together imply you must preserve protection and a route for repayment. In practice, to avoid complaints most agents either transfer protection to the landlord or return deposits within a few days when they close their lettings arm.

are there any fees for protecting deposits with tds?

Yes: TDS’s custodial scheme is free to use for landlords and agents, while the insured scheme carries fees to the scheme (the landlord/agent keeps the money and pays TDS for protection and ADR), but TDS does not publish a full insured‑scheme tariff openly on its public site.

Short explanation — the custodial option places the deposit into TDS (the scheme holds the cash) and is described in guidance as not charging a per‑deposit protection fee; the insured option leaves the money with the landlord or agent and involves paying the scheme for protection and access to adjudication. Current, detailed insured‑scheme prices or per‑deposit tariffs are not available in a public price table on tenancydepositscheme.com and typically require contacting the scheme or logging into a member area. For a practical guide to dispute routes and which scheme matters when, see our Tenant deposit dispute: how to resolve it legally in England & Wales and our Deposit protection scheme comparison: DPS vs MyDeposits vs TDS.

We're the ones registered as protecting a deposit, but the landlord wants to make deductions we don't think will survive adjudication — do we have to submit the claim as instructed anyway?

No — there is no published TDS rule that compels an agent who is the registered protecting party to submit a landlord’s deduction claim to ADR if the agent genuinely believes the claim will not be upheld; ADR is framed as an independent service for genuine disputes between parties, not a mechanism to process every landlord instruction.

What this means in practice — TDS and advisory guidance describe alternative dispute resolution as the route when landlord and tenant disagree; tenants normally must lodge an ADR claim within a limited period after moving out (guidance commonly notes about 3 months to start a claim) and the adjudicator decides based on evidence from the parties. Where the landlord and tenant agree the amount to repay, the deposit holder must return the agreed sum promptly (typically within 10 days of agreement). There is no public TDS procedure saying an agent must fabricate or advance weak claims at a landlord’s direction; your contractual duties to the landlord are separate from scheme rules and you should seek clarity in writing if pressured. If a tenant presses the matter, they can ask TDS to adjudicate or pursue the issue in court.

Last reviewed August 2026.