As a Landlord if you take a deposit from your Tenant, you MUST secure it in a Tenancy Deposit Protection Scheme which is approved and supported by the Government within 30 days of receipt.
What is a Landlord deposit?
A Landlord deposit is a set amount of money taken from the Tenant to secure the property for them to live in before the contracts are signed. This can be kept for up to 30 days after the end of the tenancy.
What is a Tenancy Deposit Scheme?
It is a Government approved scheme that was put in place to protect the deposit of the Tenant in case the Landlord attempts to keep the deposit unfairly.
Who does the Tenancy Deposit Protection Scheme affect?
Tenancy Deposit Protection Schemes affect all Landlords and Letting Agents who use Assured Shorthold Tenancy Agreements. There are a few exceptions in which you do not have to register the deposit with a protection scheme, i.e. if you are a resident Landlord; it is student halls/accommodation and if the tenancy has a worth of over £100,000.00.
Why was the law on registering the deposit applied?
The law for registering a deposit was put in place for a couple of reasons. First of all, it is because some Landlords were withholding the deposit unfairly and not giving it back to the Tenant at the end of the tenancy agreement. The other reason was because at the end of the tenancy and following inspection of the property the Landlord wanted to keep part of the deposit for damages etc. but an agreed sum could not amicably be achieved between the parties .
What is the Landlord required to do once the deposit has been protected
The Landlord must give the Tenant the following Prescribed Information:-
- the address of the rented property;
- how the deposit has been protected;
- which Company they have used to protect the deposit;
- information on the Company’s Dispute Resolution Services;
- set out why they may not get their deposit back i.e.- not paying rent, damage to property;
- contact details of the Landlord/ Agents dealing with the tenancy;
- what to do if they can no longer get hold of you at the end of the Tenancy Agreement;
- a step-by-step for how they should go about matters if there is a dispute in giving the deposit back to the Tenant.
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