Tenancy Security Deposit FAQ

Are some landlords exempt from the tenancy deposit regulations?

ANSWER 1: Yes, they are, but it depends on the type of tenancy. The deposit protection regulations ONLY apply to assured shorthold tenancies. So if you have a common law tenancy (e.g. if your landlord lives in the same building), then the regulations will not apply. They also do not apply to lodgers.

I have an existing tenant moving out mid agreement. This tenant has found someone to replace them but plans to recoup the deposit from the potential new tenant rather than from myself. What is the official way to go about this change and does it matter?

ANSWER 1: Get the leaving tenant to sign a receipt of deposit returned. You will need to make sure the deposit guarantee scheme paperwork is up to date for the new tenent.

Do landlords HAVE to take a deposit?

ANSWER 1: Believe it or not, no they don't. It's adviseable they do, but there's no legal requirement to do this.

I want to ask my letting agency to use my deposit as my last months rent, telling them that as I would be looking to move out after 3 weeks, they could use the remainder for cleaning costs if they wish. What would happen to me if I gave them this instruction?

ANSWER 1: They will probably tell you 'No'. If they allowed you to effectively breach your tenancy by non payment then they'd be in breach of their terms and conditions with the landlord. Also, from their perspective how do they know that you won't leave the place without enough money to cover the last months rent and cleaning costs. At least, that should be their thought process.

ANSWER 2: Hopefully they would ignore your request, as otherwise they could find themselves in hot water with the landlord, as the deposit is not to be used in that way, unless you are paying in arrears, of course, and you leave the flat spotless

What happens if I gave my deposit to an agent to secure and they go into liquidation? Can I get my tenant's deposit back?

ANSWER 1: Unless you are a secured creditor, i.e. a bank or the hmrc, then you are unlikely to see any money back if th ecompany goes into liquidation. however, you as the landlord are responsible for the return of the deposit to the tenant irrespective of whether it was taken/held by an agent. You should always ask to see the agents 'client deposit account' as a matter of course but if the agent decides to spend it on a vacation to the bahamas then that is your loss. You still have to return tthe deposit to the tenant. Period.

I'm a live in landlord, my tenant lives in the same house as me, he has a tenancy agreement. Do I still need to secure his deposit?

ANSWER 1: As a live in landlord you can not use an ast. You do however give your lodger a "licence" to use the communal areas of your property along with the use of their bedroom. However, ast or not, as a landlord you still have to secure any security deposit.

ANSWER 2: Yes, you still need to secure the deposit. Whenever an Assured Shorthold Tenancy is formed and a deposit is taken, the deposit must be secured by the landlord/letting agent. A Lodger or "occupier" who lives in the same property as the landlord cannot have an AST, therefore the deposit is not required to be secured.

Who is responsible for paying for securing a tenancy deposit?

ANSWER 1: The landlord is responsible for securing the tenant's deposit, and also covering any fees that may apply. However, there is a free tenancy deposit scheme available.

I forgot to put the deposit in a tenancy deposit scheme and my tenant has moved out without the 4 week notice and left a mess in my home. What can I do?

ANSWER 1: Keep quiet about it and give the deposit back. Otherwise you face being sued for 3 x the deposit in addition to being fined by the courts for failing to secure the deposit within 14 days.

ANSWER 2: You cannot use the deposit to get the property back into it's rightful condition or to cover the 4 weeks rent where your tenant vacated early, because you didn't protect the deposit. You should return the deposit, otherwise the tenant can potentially take legal action and sue you for 3x deposit.

Does the landlord need to provide an inventory under tenancy deposit protection schemes?

ANSWER 1: No. Tenancy deposit protection does not require an inventory but to help avoid disputes it is good practice for a landlord to do so.

Does the tenant have to pay for the tenancy deposit protection scheme?

ANSWER 1: No. Tenancy deposit protection schemes are free to tenants.

When should my security deposit be returned to me after i've moved out?

ANSWER 1: At the end of the tenancy, check whether you are leaving the property and its contents in the condition in which it was let to you - allowing for fair wear and tear- and check that you have paid your rent and any other expenses. Then agree with your landlord or agent how much of the deposit should be returned to you. within 10 days – you should have received the agreed amount of the deposit.

What if I the tenant owes the landlord rent? Can the landlord use the deposit to cover it?

ANSWER 1: If the tenant still owes rent before leaving the property, then the landlord is entitled to deduct this from the deposit. If the tenant owes more than the value of the deposit, then the landlord can take the tenant to court to get the rest of the money back.

What counts as normal 'wear and tear'?

ANSWER 1: The landlord cannot keep the deposit because of general wear and tear to the condition of the property. For example, if the carpet gets a bit worn out, it's probably wear and tear, but if the tenant burns a hole in it, it's not.

What if the tenant has damaged something?

ANSWER 1: The landlord is entitled to deduct as much as is needed to repair or replace what has been damaged on a 'like for like' basis. So, if an old sofa is broken, the landlord cannot deduct the cost for a brand new one.

When can the landlord take money out of my deposit?

ANSWER 1: The landlord can make reasonable deductions from the deposit for: damage to the property, unpaid rent, missing items and cleaning.If the landlord has a valid reason for keeping part of the deposit the rest of it should be returned to the tenant.Tenants can ask to be shown receipts or estimates for items that have been deducted from the deposit.

Do I need to ask for a tenancy deposit from my tenant?

ANSWER 1: No, deposits aren't required for a tenancy agreement to be legally binding, but landlords are strongly advised to take a deposit as an insurance policy.

What is a tenancy security deposit for?

ANSWER 1: Most landlords ask new tenants to pay a month's deposit as security in case the tenant damages the property or doesn't pay the rent. The deposit can be used to cover those costs.

Is there a limit to how much of a security deposit a landlord can ask for from their tenant?

ANSWER 1: The most a landlord can charge for any security deposit is the total of two month's rent for an unfurnished property, or three month's rent for a furnished property.

My tenant is taking me to court because I didnt secure his deposite. I've given him his deposit back, can I still get in trouble?

ANSWER 1: If you didn't secure the deposit at all, (and the tenancy is an ast) then i'm afraid so. if you secured the deposit late, then you may be alright - I believe it is still legally grey area with current cases.

ANSWER 2: If you've refunded his full deposit then the case should end there actually as you've already taken measures to show that his deposit was returned. The courts may still fine you for not securing it in the first place, but they can't ask you to repay 3 x the deposit as you'vew paid it back.

I forgot to put my tenants deposit into a scheme with in 14 days. Is it too late to do it and can I still be prosecuted?

ANSWER 1: It's not too late. You cannot be prosecuted. if the tenant tries to take legal action and the landlord has either repaid the deposit to the tenant or protected it before the case, then the court cannot order what has already been done. The court cannot also "order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit."

Is a deposit optional? Can I let a property out with an ast in place without requiring a deposit?

ANSWER 1: You do not have to take a deposit but then if the tenant damages the property or does not pay rent you have nowhere to take the money from. Alternatively you can take two months rent in advance at the start of the tenancy, so let's say tenancy runs from 1 jan 2010-1 jan 2011 and rent per month is £500, take £1000 on 1 jan and then £500 on first of every month, so by the time it hits december of the term you will be holding some extra money anyway. Alternatively if the tenant messes you about mid-way you have some money upfront. It's not foolproof but its an alternative to taking deposits.

My landlord hasn't secured my deposit into a scheme. What should I do?

ANSWER 1: Formally notify the landlord. If no response then file a claim against the landlord. Note the landlord can correct the problem by obtaining coverage after the fact even if they are outside the 14 day limit

How do I check if my deposit is protected?

ANSWER 1: If protected you would have received a letter directly from the DPS confirming deposit. Your tenant id would be on the letter

How much deposit should I take from my tenant?

ANSWER 1: One and a half times the aount of months rent is a fairly standard amount in the industry. If the tenant defaults on the last months rent it can be taken from the deposit and still leave some money in case of dialpidations.

What is the tenancy deposit protection service?

ANSWER 1: The deposit protection service (the DPS) is the government approved custodial tenancy deposit protection scheme. Tenancy deposit protection (TDP), as set out in the housing act 2004, requires that all agents/landlords protect their tenants' deposits under a statutory tenancy deposit scheme within 14 days of receiving a deposit. The DPS will safeguard that deposit throughout the period of the tenancy and repay the funds to the appropriate parties in accordance with their instructions at the end of the tenancy period.

Which tenancy deposit scheme should I use?

ANSWER 1: There are a few you can choose from, but we recommend the following because it's a free service: free tenancy deposit scheme. Be aware that some DPS do charge a fee