Tenancy deposit protection
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.
This section explains how the new schemes
operate. Most of this information only applies to assured shorthold
tenancies that start on or after 6 April 2007.
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
- your tenancy is an assured shorthold tenancy
(this applies to most new private tenancies)
- you are paying a deposit
It does not matter whether it is the tenant or
someone else, such as a parent, who provides the money for the
deposit.
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What if I paid a
deposit before 6 April 2007?
If your tenancy started before 6 April 2007,
then you will not normally be protected by the scheme. However, if
you have been given a new tenancy agreement since that date, you
should get advice. In this situation, the law does not specifically
say that your landlord has to protect your deposit, but the
Government has suggested that they should do so. An adviser may be
able to help you come to an agreement with your landlord.
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, where 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 Tenancy
Deposit Scheme
- 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
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Is there anything I
need to do?
When you move into a property, it is also a
good idea to draw up an inventory. 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. Having an
inventory can help you resolve disputes at the end of your tenancy
about whether you have caused any damage to the property or whether
items are missing. It is in your own interests to take care of the
property you are renting.
It is also advisable to keep a record of all
the rent payments you make either in a rent book or by keeping
receipts.
What can I do if my
landlord or agent does not provide the required information or has
not 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.
In addition, if your landlord or agent hasn't
protected your deposit and provided the required information within
14 days, then there are restrictions on how they can evict you.
Normally, landlords of assured shorthold tenants can evict a tenant
by giving a minimum of two months' notice and then getting a court
order without having to show a reason. This is known as the
'shorthold ground'.
However, if your landlord or agent hasn't
protected your deposit and provided the required information within
14 days, then they cannot use the shorthold ground to evict
you.
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 ten 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. These schemes will not pass on any interest to the
tenant.
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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 does not agree to use
the ADR service then the dispute will usually go to the County Court.
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