A tenancy deposit is a sum of money paid by a tenant to a landlord or letting agent as security against any potential damages, unpaid rent, or other breaches of the tenancy agreement. The deposit serves as protection for the landlord in case the tenant causes any harm or fails to fulfil their obligations under the tenancy.
Whether you are a landlord or a tenant the following are key points about tenancy deposit that you should note:
- Tenancy Deposit Protection: Since April 6, 2007, landlords and letting agents must protect the deposit in a government-approved tenancy deposit scheme (TDP) within 30 days of receiving it. There are three government-approved schemes: Deposit Protection Service (DPS), MyDeposits, and Tenancy Deposit Scheme (TDS).
- Prescribed Information: Within 30 days of receiving the deposit, landlords must provide the tenant with certain prescribed information. This includes details about the tenancy deposit protection scheme being used, how to reclaim the deposit, and other relevant information.
- Repayment of the Deposit: At the end of the tenancy, if there are no disputes between the landlord and tenant, the deposit should be returned to the tenant within 10 days of both parties agreeing on the amount to be returned. If there are disputes, the Tenancy Deposit Protection (TDP) scheme offers a dispute resolution process.
- Deductions: Landlords can make deductions from the deposit to cover rent arrears, damages, cleaning costs, or any other reasonable expenses incurred due to the tenant's breach of the tenancy agreement. However, these deductions must be supported by evidence and must be fair and reasonable.
- Dispute Resolution: If the landlord and tenant cannot reach an agreement on the deposit deductions, they can use the TDP scheme's dispute resolution service. An independent adjudicator will review the evidence from both parties and make a decision.
- Non-compliance with the Requirement to Protect the Deposit: If a landlord fails to protect the deposit or provide the prescribed information within the required time frame, the tenant can take legal action. The court may order the landlord to repay the deposit and pay the tenant compensation of up to three times the deposit amount.
Whether you are landlord or a tenant our lawyers can provide tailored advice on tenancy deposit. Contact Us Today.
Last updated: 23 May 2023