Tenant Rights: Deposits and Deposit Protection
As a tenant renting a private residential property, you’ll probably have to pay a deposit to your landlord or their letting agent prior to your renting the house. It can be hard to find the equivalent of four or five weeks rent as a deposit and equally worrying to think that your deposit money is no longer under your control. In this blog we look at tenant rights on deposits and deposit protection.
Landlord and tenant solicitors
If you need legal advice about your tenancy or if you are experiencing difficulties with the return of your deposit then the landlord and tenant team at OTS Solicitors can help you. Call us on 0203 959 9123 or complete our online enquiry form.
Do I have to pay a tenancy deposit?
Most landlords ask a tenant to pay a deposit at the start of their tenancy. If you are renting a property on an assured shorthold tenancy (most tenancies are assured shorthold tenancies) then any deposit you provide is subject to rules and regulations. These rules are designed to protect you from unscrupulous landlords viewing the deposit money as theirs of right to claim at the end of the tenancy, whether or not you caused any damage to the property during your tenancy.
Although you are unlikely to be able to find a property available to rent where the landlord doesn’t require a deposit, if you are renting on an assured shorthold tenancy your landlord is under a legal obligation to protect your deposit. If your landlord doesn’t protect your deposit then they could face a fine of up to three times the amount of your deposit.
If you are renting a room in a house or student accommodation then the likelihood is that any deposit you pay will not be protected under the tenancy deposit scheme.
How much is a tenancy deposit?
The law says that if you entered into your tenancy after the 1 June 2019, it is illegal for your landlord to ask you to pay:
• More than five weeks rent as a deposit if your annual rent is less than £50,000 or
• More than six weeks rent as a deposit if your annual rent is more than £50,000.
What happens if a relative pays the deposit for me?
It is often the case that a parent or relative will help out financially and pay the deposit. If your deposit is paid by a member of your family or a friend then your deposit will still be protected under the tenancy deposit scheme provided your tenancy falls within the scheme.
Is my holding deposit protected?
If you pay a holding deposit to your landlord or to a letting agent to reserve the property that you plan to rent then your holding deposit will not be protected under the tenancy deposit scheme.
How is my tenancy deposit protected?
Since April 2007 landlords have had to comply with the law on Tenancy Deposit Protection (TDP) and comply with Tenancy Deposit Scheme rules. The scheme applies to all assured shorthold tenancies where a tenant has paid a deposit.
Tenancy deposit protection tries to ensure that the deposit is held with a recognised deposit agency. Your landlord must protect your deposit within thirty calendar days of receiving it. The government requires deposits to be registered and there are currently three schemes in operation in England:
• Deposit Protection Service (Custodial and Insured)
• MyDeposits
• Tenancy Deposit Scheme.
When your landlord or letting agent takes your deposit they are under a legal obligation to let you have specified information within thirty days of taking your deposit money. The information you are entitled to includes:
• The amount of the deposit you have paid
• The address of the property you are renting
• How the deposit is protected to include the tenancy deposit scheme name and its dispute resolution service
• Why your landlord will be entitled to keep some or all of your deposit and how you can apply to get the deposit back
• What you can do if there is a dispute over the return of the deposit.
Types of tenancy deposit schemes
In England and Wales there are two types of tenancy deposit schemes, namely:
• Custodial and insurance-based or
• Insurance-based.
Both types of tenancy deposit scheme have to be government approved.
The Deposit Protection Service
If your deposit is placed in a custodial and insurance-based deposit scheme (the Deposit Protection Service) your deposit is held by the scheme provider and not by your landlord. The scheme is free to use.
At the end of your tenancy, you may get all or some of your deposit back. If you are in dispute with your landlord about how much deposit you should get back, the scheme will keep the deposit until the dispute resolution service, or the court, decides how much of the deposit (if any) you should get back.
Insurance-based tenancy deposit schemes
In the insurance-based tenancy deposit schemes (mydeposits and the Tenancy Deposit Scheme) your landlord keeps your deposit but there is insurance to insure against your landlord failing to repay you all or some of the deposit back at the end of the tenancy.
Within ten working days of the end of your tenancy, your landlord or the letting agent should return all (or some) of your deposit. If there is a dispute between you and your landlord about how much deposit money you should get back then your landlord has to give the disputed amount of deposit money to the scheme provider until you reach agreement through a dispute resolution service or the court makes an order.
What can I do if my landlord hasn’t protected my deposit?
If your landlord was legally obliged to protect your deposit but didn’t do so then you can take your landlord to court either during the tenancy or up to three months after the tenancy has come to an end. The court can order that your landlord pay you up to three times the amount of the deposit.
How do I make sure I get my deposit back at the end of my tenancy?
All tenants want to make sure that they get their deposit back at the end of their lease but to achieve that you need to:
• Make sure that you meet the terms of your tenancy agreement
• Make sure that you do not damage the property
• Make sure that you have paid the agreed rent and that you have paid all relevant utility bills.
A good or experienced landlord or letting agent will try to reduce the risk of a dispute about the return of your deposit by:
• Completing an inventory of items at the property. You should be asked to sign the inventory to say that you agree the document. The inventory should not only say what items are at the property but should say if they are damaged or marked. If you are worried about losing your deposit you can also take photographs of the items or a video of the property at the start of your tenancy so you can prove the condition of wall decorations and furnishings at the date you moved into the property
• Inform your landlord if any damage occurs or repairs are needed during the tenancy so neither of you are surprised at the end of the tenancy
• Think about taking out adequate insurance to cover you for any damage to the property or its fixtures.
What can I do if my landlord won't give my deposit back?
The three Tenancy Deposit Protection providers offer an alternative dispute resolution service if you and your landlord can’t agree on whether you should get all (or some) of your deposit back at the end of your tenancy. If you can't reach an agreement through the alternate dispute resolution service you or your landlord could go to court. Prior to threatening court proceedings it is best to look at how cost effective a court application might be. A specialist landlord and tenant solicitor can help you weigh up your best options.
Landlord and Tenant Solicitors
If you need legal advice about your tenancy agreement or if you are in dispute over the return of your deposit then the landlord and tenant team at OTS Solicitors can help you. Call us on 0203 959 9123 or complete our online enquiry form.