The importance of protecting deposits
Mon 06 Mar 2017
Landlords should be aware that it is vital that they protect a tenant's deposit within 30 days of taking it.
If you are using an assured shorthold tenancy (AST), which almost all residential tenancies in England and Wales do (the default tenancy), and if you take any form of deposit – defined as any monies held for security to be returned or withheld – then it MUST be protected within 30 days of receiving it.
You must also, within 30 days, do the following:
- Serve on your tenant/s a correctly worded statutory notice
- Serve the deposit scheme information leaflet
- Make sure the statutory notice refers to the clause in your tenancy agreement which explains under what circumstances the deposit can be withheld
- Get proof of service for these notices.
The deposit must be protected in a government-backed tenancy deposit scheme (TDP). In England and Wales the deposit can be registered with:
- Deposit Protection Service
- My Deposits
- Tenancy Deposit Scheme
Providing the tenancy agreement says so, and it is important to point this out in the statutory information you serve on your tenant, landlords can withhold deposits if:
- The tenant fails to meet the terms of the tenancy agreement
- Does damage to the property
- Fails to pay rent or bills
At the end of a tenancy you must return the deposit within 10 days of you both agreeing how much is to be refunded. If you’re in dispute, then the deposit will be protected in the TDP scheme until the issue is resolved.
Information landlords must give to tenants
Once you have received the deposit, you have 30 days to tell your tenant/s:
- the address of the rented property
- how much deposit you’ve taken
- how the deposit is protected
- the name and contact details of the tenancy deposit protection (TDP) scheme and its dispute resolution service
- yours (or the letting agency’s) name and contact details
- the name and contact details of any third party that’s paid the deposit
- why you would keep some or all of the deposit – refer to the clause in your tenancy agreement
- how the tenant applies to get the deposit back
- what the tenant should do if they can’t get hold of the landlord at the end of the tenancy
- what the tenant must do if there’s a dispute over the deposit.
An accurate and detailed inventory is crucial to both landlord and tenant. It will be used by the Deposit scheme when deciding on how to repay the deposit.
All deposits taken and held by CB Lettings are transferred to the Deposit Protection Service. In addition we produce a comprehensive electronic inventory which is automatically sent to the Deposit Protection Service when it is produced. Please call the CB Lettings Team for more information.
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