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Is Your Tenants Deposit Secure?

Tenancy DepositsBack in April 2007, a regulation was introduced stating all tenants deposits in an assured shorthold tenancy, must be placed in a tenancy deposit protection scheme.

There are three main Government Deposit Schemes for England & Wales:

1.      Deposit Protection Service – http://www.depositprotection.com

2.      My Deposits – http://www.mydeposits.co.uk

3.      Tenancy Deposit Scheme – http://www.tds.gb.com

The deposit must be placed in the deposit scheme by either the landlord or their agent within 30 days of receiving it.

At the end of the tenancy

The government schemes aim to help ensure tenants are given their deposits back if they:

  • Have met and adhered to the terms of their tenancy
  • Have not damaged the property
  • Have paid all rent and bills

Once an agreement has been paid between both the landlord and the tenant in regards to how much they will receive, the deposit must be repaid back to the tenants within the next 10 days.

If, for whatever reason, the landlord is in dispute with the tenant over the deposit, the deposit will be held by the scheme until it is settled.

A holding deposit from future tenants will only be classed as a deposit and must be protected once the future applicants become tenants.

Third Party Deposits

Even if a deposit is paid by someone else, such as a rent deposit scheme or the tenant’s parents, a deposit scheme must be used.

Information which must be given to tenants

Within 30 days of receiving a deposit, the tenants must be informed of the following information in writing:

  • The address of the rented property
  • How much deposit they’ve paid
  • How the deposit is protected
  • The name and contact details of the tenancy deposit protections scheme and its dispute resolution service
  • The landlords/ letting agents name and contact details
  • The name and contact details of any third party whom may have paid the deposit (if applicable)
  • Why you (the landlord) would keep some or all of the deposit – such as if the tenants damaged the property and the landlord would need to fix it.
  • How the tenants can get the deposit back at the end of the tenancy
  • What the tenant should do if they can’t get hold of you at the end of the tenancy
  • What the tenant should do if there is a dispute over the amount of deposit to be returned at the end of the tenancy

What if a landlord doesn’t protect their tenant’s deposit?

If a tenants deposit is not secured with a tenancy deposit protection scheme, they have the right to apply to a county court. This can be done at any time during the tenancy.

The court can order a landlord to either:

  • Repay the deposit back to the tenant
  • Pay the deposit into a custodial tenancy deposit protection schemes bank account within the next 14 days

It is important to remember the court can order a landlord to repay the tenants up to three times the original deposit within 14 days of making the order.

The court may also instruct the tenants they don’t have to leave the property at the end of the tenancy if their deposit was not secured using a Tenancy Deposit Protection Scheme.

Disputes regarding deposit amounts

If a dispute arises between the landlord and the tenant, the free dispute resolution service, provided by the deposit protection scheme, should be used.

For more information on how to use the Dispute Resolution Service, contact the relevant tenancy deposit scheme, or get more help and information from your local Citizen Advice Bureau or a solicitor.

Alternatively contact your local lettings and specialist management company on 01924 477999 for further information on how the Deposit Schemes work.