Tenancy Deposit
What is the deposit for?
What happens to the money?
How can I be sure I will get it back?
How can an inventory help?
What records should I keep?
When can the landlord keep my deposit?
What if I've damaged something?
What counts as normal 'wear and tear'?
Precautions to avoid losing your deposit
Can my landlord take money from the deposit for cleaning or
decorating the flat?
What if my deposit is not returned after I leave?
Tenancy Deposit Schemes
Custodial scheme
Insurance-based schemes
How does Tenancy Deposit Protection affect me?
Will students who pay deposits be subject to tenancy deposit schemes?
How can tenants find out if their deposit is protected?
What happens where a parent pays the deposit on a student tenant's behalf?
How would the deposit be repaid once an overseas student returns home?
When must deposits be paid back?
Can't it be paid back before then - i.e. on the last day of the tenancy?
What if a tenant moves out of their home before realising that their deposit has not been protected?
What happens if a deposit has not been protected?
What is the deposit for?
Most landlords or letting agents ask for one month's rent as a deposit. Some landlords ask for more than this. Rents can vary enormously and there is no limit on the amount of money that landlords can charge. Your deposit gives your landlord security in case you cause damage to the property or don't pay the rent. The deposit belongs to you and should be returned when you move out unless your landlord can show s/he has suffered a financial loss. Your landlord cannot take money out of your deposit to cover normal wear and tear. You can ask to be shown receipts or estimates for items that have been deducted from your deposit.
What happens to the money?
If you have an Assured Shorthold Tenancy (AST) with a private landlord and your tenancy was entered into before 6 April 2006 your landlord (or agency) holds on to the money until you leave the property. For all tenancies entered into on or after this date (even if you just signed a new agreement for the same property) your deposit should now be held in accordance with a statutory Tenancy Deposit Scheme (TDS).
At the end of the tenancy the deposit should then be returned to you, but reasonable deductions can be made if you cause any damage or owe any rent money. Your landlord is responsible for returning the deposit even if you initially paid it to a letting agent acting on your landlord's behalf.
How can I be sure I will get it back?
If your deposit is covered by a TDS, the scheme will safeguard the return of any deposit which is owed to you. The landlord can only keep all or part of your deposit if you have caused damage to the property or not paid the rent.
To ensure that you get your deposit back at the end of the tenancy it is advisable to:
- check that your tenancy agreement says exactly what the deposit covers and when it will be returned
- check which TDS your landlord uses
- ensure there is a detailed inventory of the property
- keep records of all rent payments
- notify the landlord of any damage, and repair it if you caused it
How can an inventory help?
Where your deposit is covered by a TDS, the scheme will recommend your landlord to issue an inventory, for all tenancies however it is still good practice to use one. An inventory is a detailed list of the contents and condition of the property and any items provided with it, such as furniture or equipment. You should do an inventory of the property with the landlord or agent before you move in. Make sure you note if anything is damaged, marked, scratched, burnt or worn. The landlord or agent may prepare one and give it to you. Always check that it is accurate and that everything is in working order.
Both you and the landlord should sign the inventory and keep a copy. If the landlord or agent refuses to do an inventory, prepare one yourself and get an independent witness (such as a friend) to sign it and send a copy to your landlord or agent. You could also take photos showing the condition of the property when you move in.
What records should I keep?
It is always a good idea to keep records, just in case. If you have problems getting your deposit back they could make a big difference. Useful items might include:
- information sent to you by the TDS
- the inventory
- any photographs you took when you moved in
- receipts for items you have replaced
- receipts or estimates for repairs done to the property
- receipts for rent payments
- letters to your landlord, and any replies you have received.
When can the landlord keep my deposit?
The deposit belongs to you and should be returned to you unless your landlord can show s/he has suffered a financial loss. Your landlord can make reasonable deductions from the deposit for:
- damage to the property
- unpaid rent
- missing items
- cleaning
Even if your landlord has a valid reason for keeping part of your deposit the rest of it should be returned. Your landlord may try to withhold some or all of your deposit for a different reason such as because you had a noisy party when your contract stated you could not. This is not legal. Landlords can only claim for any financial loss they have actually suffered. Your landlord cannot normally deduct costs for relating the property such as advertising or agency fees. This would only be possible if you left your tenancy without ending it properly.
If you have a dispute with your landlord about the return of your deposit contact the TDS your landlord is using.
Tenancy agreements often state that carpets and curtains must be cleaned to a Professional standard before the tenant moves out. This does not mean that they have to be as clean as or cleaner than when you moved in. You are only required to clean any items soiled above normal wear and tear. If possible keep records and receipts for any cleaning you do or pay for.
What if I've damaged something?
Your landlord can only deduct as much as is needed to repair or replace what you have damaged on a 'like for like' basis. So, if you break an old armchair, you shouldn't have to pay for a brand new one. As with cleaning, you should not be penalised for normal wear and tear.
What counts as normal 'wear and tear'?
Your landlord cannot keep your deposit because of general wear and tear to the condition of the property. For instance, if the carpet gets a bit worn out, it is probably wear and tear, but if you burn a hole in it, it is not. The amount of wear and tear it is normal to expect depends on the condition of the property when you moved in and the length of time you lived there. If you think you are likely to have problems it may be worth taking photos or getting a witness as early as possible in your tenancy.
Precautions to avoid losing your deposit
Even where your deposit is covered by a Tenancy Deposit Scheme there are still some precautions you can take to avoid losing your deposit, and which will help you if a dispute arises.
ALWAYS get a written receipt for the money paid, and keep it safe (this should also have your landlord's full name and address on it). Take pictures, when you move in, and when you move out. Put the date on if your camera allows you to do so. Pictures are VERY useful in court and most landlords will be helpless if you can prove you left the property spotless. If you don't have a camera, take pictures on your mobile phone, or buy a disposable camera, it is worth the expense!
Agree an inventory with your landlord before you move in so that he cannot claim for damage done before you moved in, draw his attention to any outstanding repairs or damage by previous tenants. If your landlord will not provide an inventory, make your own list of fixtures and fittings and their condition with a witness when you move in and out (photographs are very also useful in the event of a dispute).
PLEASE NOTE: If you try to offset your deposit by cancelling a rent cheque once you have already given it to your landlord you can be sued for the amount of the dishonoured cheque without the landlord needing to prove the case for damage or loss to his property, etc. You will still be entitled to claim back your deposit but may not be able to use this as a counter claim. During your tenancy notify your landlord (preferably in writing) of any repairs that are necessary immediately as you may be held responsible for deterioration caused by unreported problems e.g. leaks or damp.
Can my landlord take money from the deposit for cleaning or decorating the flat?
Most tenancy agreements have a clause in them, which refers to cleaning of the property including curtains, carpets, bedding, etc. If so then it is best to find out what this entails, but is an extra cost which you are expected to bear. If your landlord expects professional cleaning of the property at the end of the tenancy it may be cheaper for you to arrange this than allow the landlord to pay for it as he can then deduct this sum from your deposit and it can be difficult to dispute this, particularly if the landlord has receipts. If carpets, etc have any marks at the start of the tenancy ensure that this is noted on your inventory. Decorating costs after you move out should not be deducted from your deposit. UNLESS you have damaged the property beyond what is considered "normal wear and tear" e.g. if you have put up pictures or shelves which have left holes in the wall your landlord could charge you for redecoration.
What if my deposit is not returned after I leave?
If you move out and your landlord does not return your deposit you should contact the Tenancy Deposit Scheme your landlord uses. You may wish to enter into a dispute resolution mechanism provided by the scheme, or it may still be necessary to take legal action in the County Court, usually the "Small Claims" procedure is appropriate.
Tenancy Deposit Schemes
Tenancy Deposit Protection applies to all assured shorthold tenancies where a deposit is taken. Virtually all new contracts to let a property are assured shorthold tenancies. Tenancy Deposit Protection has been introduced:
After 6 April 2007, when you are signing a new tenancy agreement with your landlord, ask how your deposit will be protected. Your landlord can provide you with the contact details of the scheme protecting your deposit.
There are two types of TDS
Custodial scheme
- the tenant pays the deposit to the landlord
- the landlord then pays the deposit into the scheme
- within 14 days of receiving a deposit, the landlord must give the tenant information about the scheme being used and the tenancy
- at the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme which returns the deposit, divided in the way agreed by both parties
- if there is a dispute, the scheme will hold the amount until the dispute resolution service (Alternative Dispute Resolution ADR) or courts decide what is fair
- the interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will used to offer interest to the tenant, or landlord if the tenant is not entitled to it.
Insurance-based schemes
- the tenant pays the deposit to the landlord
- the landlord retains the deposit and pays a premium to the insurer - the key difference to the custodial scheme
- within 14 days of receiving a deposit, the landlord must give the tenant information about the scheme being used and the tenancy
- at the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit
- if there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved
- if, for any reason, the landlord fails to comply the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
How does Tenancy Deposit Protection affect me?
Will students who pay deposits be subject to tenancy deposit schemes?
Where student accommodation is let under an assured shorthold tenancy, the deposit must be safeguarded. Halls of residence are not to be let on an assured shorthold tenancy if they are controlled by the university. However, some universities lease their halls of residence to private companies. These companies may let the accommodation on an assured shorthold tenancy.
How can tenants find out if their deposit is protected?
Within 14 days of receiving a deposit, landlords will have to provide tenants with details of which scheme is protecting the deposit. The scheme will be able to confirm if the deposit is protected.
What happens where a parent pays the deposit on a student tenant's behalf?
Where the deposit is paid for an assured shorthold tenancy, it would still need to be safeguarded in a scheme.
How would the deposit be repaid once an overseas student returns home?
Schemes will be able to return deposits into foreign bank accounts. There would be a charge for this that would need to be paid by the tenant.
When must deposits be paid back?
When the landlord and tenant agree how the deposit should be returned, in full or in part, it must be paid back within 10 days.
In the custodial scheme: within ten days of the scheme being notified of agreement between the landlord and tenant or notified of an ADR/court decision.
In the insurance-based scheme: within ten days of the tenant requesting that the landlord return his deposit.
In case of a dispute: within ten days of the scheme being notified of the ADR service's, or court's, decision.
Can't it be paid back before then - i.e. on the last day of the tenancy?
Yes. Ten days is the maximum. In practice, we would like to see deposits returned more quickly and will be working with scheme administrators to see how this can best be achieved.
Many landlords currently pay the deposit back on the last day of the tenancy. In the insurance-based scheme, if the landlord and tenant agree on the amount to be returned, the deposit can be returned on the last day of the tenancy.
What if a tenant moves out of their home before realising that their deposit has not been protected?
The tenant will need to apply for a court order and the court will order the landlord to repay the deposit amount to the tenant.
In order to avoid this situation, tenants should make sure that their landlord has given them the prescribed information relating to the scheme that is safeguarding their deposit, and check that the deposit is safeguarded, within 14 days of paying the deposit.
What happens if a deposit has not been protected?
Unable to use `notice only'
Currently, a landlord can obtain an order for possession of an AST at any point after the first six months of the tenancy providing any fixed term has expired and the landlord gives the tenant at least two months' written notice (Under Section 21 of the Housing Act 1988). This is known as 'notice-only'.
However, under TDP, the landlord is unable to regain possession of the property using the usual 'notice only grounds', if the deposit has not been safeguarded and the prescribed information passed onto the tenant within 14 days of the landlord receiving it.
Fine
Tenants can apply for a court order requiring the deposit to be safeguarded or the prescribed information to be given to him or her about the scheme in which the deposit is safeguarded.
Where the court believes that the landlord has failed to comply with these requirements, or the deposit is not being held in an authorised scheme, the court must either order the landlord within 14 days of the making of the order to repay the deposit; or order the landlord to pay the deposit to the custodial scheme administrator. The court must also order the landlord to pay to the tenant a fine of three times the deposit amount within 14 days of the making of the order.