Property118 have sought clarification after many landlords have raised concerns about how tenancy deposits will affect their ability to regain possession under the Renters’ Rights Act.

Government guidance states that a court will only grant a possession order if:

• The deposit has been paid into a government-approved tenancy deposit scheme, or
• The deposit has been returned to the tenant.

Property118 sought clarification from the Ministry of Housing, Communities and Local Government. A spokesperson confirmed: “A court can award possession if the landlord has stored a deposit in a government-approved scheme (and complied with all related legal requirements), or returned the deposit in full or with agreed deductions. The Act does not change what counts as a valid deduction, which includes unpaid rent and bills.”

Specifically, a court will grant possession if, at the hearing:

1. The deposit is held in a government-approved scheme, the landlord complied with all scheme rules, and the tenant was provided with the required deposit information.
2. The deposit has been returned in full.
3. The deposit has been returned with deductions agreed by both landlord and tenant.
4. An application under section 214(1) of the Housing Act 2004 has been made to determine if the deposit was correctly handled, and the case has been resolved, withdrawn, or settled.

This clarification provides landlords with clear guidance on how compliance with deposit rules interacts with possession rights under the Act.