DEPOSITS
A deposit is paid to the landlord at the start of the tenancy to safeguard against any damage caused to the property beyond normal wear and tear, or against any unpaid bills. The amount can be nominal but it is usually related to rent, it is illegal for a landlord to charge more than two months rent as a deposit
The landlord is legally obliged to return your deposit in full if you have not caused any damage or left any bills unpaid. Problems often occur when there is a dispute over what the deposit is for and what the nature of the damages are.
Tenancy Deposit Schemes
From 6 April 2007, when you pay a tenancy deposit for an assured shorthold tenancy , the landlord or letting agent must protect your deposit through a Government-backed tenancy deposit scheme. The Scheme only applies to assured shorthold tenants who take up a new tenancy from 6 April 2007, or whose landlord gives them a new tenancy agreement on or after that date.
Why have the schemes been introduced?
The Government has introduced the schemes to protect tenancy deposits and provide a fairer system for settling disputes about the return of a deposit at the end of a tenancy. Before introduction of these schemes, if a landlord kept all or part of your deposit it could be difficult to get it back. With the new schemes, an independent service helps to resolve disputes about deposits at the end of a tenancy. This service is free for tenants.
Will I be protected by the scheme?
You will be protected by the scheme if you are:
- renting a home from a private landlord or letting agent on or after 6 April 2007, and
- your tenancy is an assured shorthold tenancy (this applies to most new private tenancies), and
- you are paying a deposit (not the same as rent in advance)
It doesn't matter whether it is the tenant, or someone else such as a parent, who provides the money for the deposit.
What if I paid a deposit before 6 April 2007?
If you paid a tenancy deposit before 6 April 2007, then you will not be protected by the scheme unless your landlord or agent renews your tenancy on or after 6 April 2007, and gives you a new agreement. See Tips on safeguarding your deposit below.
What does my landlord or agent have to do?
After you've paid your deposit, the landlord or agent must then protect your deposit using a tenancy deposit scheme. There are two types of scheme available:
- a custodial scheme. With this scheme, the landlord or agent pays the deposit to the scheme, which will keep it until the end of your tenancy.
- an insurance scheme, where the landlord or agent keeps the deposit but pays insurance premiums to the scheme. This means that the deposit is insured if there is any dispute, and the scheme will repay the tenant the agreed amount directly. The insurance scheme can charge fees to landlords for membership and can require contributions towards the costs of insurance.
It will be up to your landlord or agent to decide what scheme to use. They must then provide certain information to you within 14 days of the day when you paid your deposit. This information includes:
- the landlord or agent's contact details
- which tenancy deposit scheme they are using and the contact details for the scheme
- information about the purpose of a tenancy deposit.
- how you can apply to get the deposit back at the end of the tenancy
- what you can do if there is a dispute about the deposit.
If you don’t get this information, ask your landlord or agent the simple question – ‘how is my deposit protected?’
Who are the organizations running the schemes?
The three Tenancy Deposit Schemes are:
Tenancy Deposit Solutions Ltd
www.mydeposits.co.uk
info@mydeposits.co.uk
The Tenancy Deposit Scheme
www.tds.gb.com
0845 226 7837
The Deposit Protection Service
www.depositprotection.com
0870 707 1 707
Ask your landlord which scheme is protecting your deposit.
Is there anything I need to do?
- You have a responsibility to return the property in the same condition that it was let to you, allowing for fair wear and tear.
What can I do if my landlord or agent doesn't provide the required information or hasn't protected my deposit?
If your landlord or agent hasn't protected your deposit and provided the required information within 14 days, then you can apply to the county court for an order that the landlord or agent should pay the deposit back to you, or protect it in one of the tenancy deposit protection schemes. The court will also order the landlord or agent to pay you compensation equivalent to three times the value of the deposit you paid. The landlord or agent must do all of these things within 14 days of the court order.
What happens at the end of my tenancy?
When you leave, if you and your landlord or agent both agree on how much of the deposit you should get back, you should get it back within 10 days of agreeing.
If your deposit was held in a custodial scheme, you will also receive some interest on the deposit. The custodial scheme will repay tenants direct, either by cheque or by electronic transfer. Deposits held in the insurance-based schemes will be repaid by the landlord either in cash or by cheque, as they choose. Deposits held in the insurance-based schemes will not pass on any interest to the tenant.
What if there is a dispute about getting my deposit back?
Your landlord or agent is only entitled to keep all or part of your deposit if they can show that they have lost out financially because of your actions, for example, if you have caused damage to the property, or you owe rent. Ask your landlord or agent for a breakdown of the specific costs that they are taking out of your deposit. Your landlord or agent cannot keep your deposit to cover putting right normal wear and tear. There are rules on what costs can be deducted from your deposit.
If you don't agree that your landlord or agent should have kept all or part of your deposit, or you disagree with some of the costs that they have taken out of it, then the tenancy deposit protection scheme your landlord or agent has used will offer a free service to help resolve disputes. Information on what you need to do if there is a dispute will be contained in the information your landlord or agent will have given you at the start of your tenancy (see above). Each scheme will contain an Alternative Dispute Resolution (ADR) service. When a dispute occurs, and if you and your landlord both agree to use the service, you will have to agree to accept its decision and will not be able to apply to the courts. If you or your landlord do not agree to use the ADR service then the dispute will usually go to the county court.
Where can I get more information?
Visit the Directgov website for guidance booklets for both landlords and tenants. These are available in a range of languages, including Welsh, Turkish, Punjabi, Chinese, Bengali, Urdu, Gujurati and Polish.
Alternatively, you can also get more general information about the tenancy deposit protection scheme from the Communities and Local Government website.
Tips on safeguarding your deposit
Moving in to a new house can be an exciting time but that sometimes means that important things are overlooked. When you first move in you might not have noticed that iron burn left in the carpet and your landlord might not have noticed either, but they might when you move out and charge you for it. By acting on the tips below you might find that you have less problems getting your deposit returned to you. It might not be the most exciting thing you’ll do this week but it might be a useful one if you want your deposit back at the end of your tenancy.
Tips to help you get your deposit back:
- Ensure your landlord gives you the relevant information regarding where your deposit is being held if you paid your deposit on or after the 6th April 2007. For more information of the Tenancy Deposit Scheme click here.
2. Check what is included in your rent before you move in, i.e. water, electricity and gas. If utility bills are included in your rent check if there is an upper limit.
3. Keep a record of any payments you make including rent, deposit, retainer and bills etc - ask for a receipt for any money paid.
4. Make an inventory of the house contents, list all defects and give a copy to your landlord. If they refuse ask an independent witness to sign it with you.
5. It can useful to take pictures which show any damage and the condition of the property when you move in to help resolve any disputes over damage when you move out.
6. Box up any of the landlords items that you are not going to use in the house, make a list of the contents and ask the landlord to take it away or store it somewhere it won’t get damaged.
7. Report any breakages to your landlord in writing and keep a copy, even if you have spoken to them about it on the phone.
8. When you leave the property make another list with an independent witness to go along side the initial one you made when you moved in. Also take more photos.
9. Be aware that a deposit is not there to cover ‘wear and tear’ - so for example your landlord cannot charge you to repair a threadbare carpet.
If your landlord refuses to return your deposit in full then visit the Advice Centre for further advice on the options available to you.
If your landlord refuses to return your deposit & it isn’t held in a tenancy deposit scheme.
Firstly, write a letter demanding your money back. Explain the reasons why you believe the deposit should be returned, and give the landlord a specific time to return it e.g 14 days. Finish the letter stating that if the money is not returned you will take further action. Like all letters sent to the landlord, it is always advisable to send it recorded so that receipt cannot be denied.
If the landlord still refuses to return your deposit the second step is to approach the Advice Centre. We will be able to tell you if you are entitled to your deposit back, and to write a letter on your behalf. Landlords often respond more readily to official letters which quote their obligations in law. It is usual to threaten legal action in this letter and, if the landlord still refuses to 'pay up', you should move onto the third and final stage, to sue the landlord through the small claims court.
The Small Claims Court can be used by anyone owed under £5,000. The court is more like an office, with those involved sitting around a table, and the judge dressed in a suit, not a wig and gown. Legal aid is not available for these cases.
If you wish to take proceedings through the small claims court, contact The Advice Centre, who will explain all the necessary procedures and offer support in court if necessary. The process is very simple, and students should never be put off trying to regain their deposits through the small claims court.
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