Tenant Deposit Protection

In April 2007, the Government put in place a piece of legislation affecting all landlords and how they treat tenant deposits. It requires all landlords throughout the United Kingdom to place their tenants’ deposits into the tenancy deposit protection scheme.

The tenancy deposit protection scheme was put into place to ensure transparency and honesty when dealing with tenants’ deposits. Each scheme provides a free adjudication service to help resolve any disputes that may occur between the landlord and tenant.

The deposit scheme aims to ensure that they get their deposit back at the end of the tenancy. This is providing that the tenants comply with the terms of their tenancy and return the property in a good, clean and undamaged condition.

We are a member of the Deposit Protection Scheme.

This ensures that every landlord that we work with has a tenancy deposit scheme in place.

If we manage the property, we will provide you with full details of the scheme that we use.  We currently use the Deposit Protection Service.  The document includes the list of terms and conditions of the scheme itself together with various instructions from you to carry out.  This should always be served on you prior to you moving in.  Once you have moved in the deposit is registered with the Company within 30 days. They then write to you direct with all the details of the scheme itself.  You may find that individual landlords sometimes use their own schemes as there are various agencies. They must serve on you the same documentation and the scheme will always write to you direct.  It is important that once you have moved in you have received this within 30 days.

If you are a landlord currently looking for a letting agent, why not contact us today for a free valuation? Just click here. 

Update.

There are now three available schemes in relation to deposits. These are;

• Deposit protection service.
• Mydeposits
• The Deposit Protection scheme.

All the schemes offer two different options. There is a scheme which is free and they hold the deposit or alternatively the agents or the landlord can hold the deposit. In this instance you have to pay into an insurance scheme known as an insured. There is normally a cost for this.

All of the schemes do things in a different way whether they are custodial or an assured basis. It is so important as a landlord you understand you must ensure your deposit is protected.

We often take over cases from landlords and find that they are unprotected or they did not do it in the correct manner.

One of the problems with landlords and some other agents is they don’t understand what you need to do in order to protect a deposit. It is not just putting it into a scheme.

The process.

You have to serve the details of the scheme on the tenant. This has to have certain information. You should always check with the individual scheme what information you need to provide but it is normally the following;

Landlords name and where he can be contacted.

Details of the scheme itself

How much the deposit it

Length of the tenancy agreement

Rental figure

Etc

What landlords or letting agents don’t understand is not only do you now need to serve a prescribed information document which the tenant has to sign and accept you also have to serve the terms and conditions of the scheme. These documents can run in to hundreds of pages and thing from 50-76 pages long. However, it is absolutely critical that landlords do this.

A deposit cannot be more than 5 weeks rent. This limit is to AST, students in halls of residence and lodgers. As long as your rent is less than £4167 a month.

If you think you have been over charged then the schemes on a custodial basis such as the deposit protection, the one we use, can repay you a certain amount of the deposit in order to correct this. It may be that the deposit was registered some many years ago and you haven’t realised it is now over charged.

If you are a landlord and not sure always take professional advice. The deposit schemes are fought with danger and there are some golden rules you need to understand. Including what the consequences can be.

These can be as follows;

The deposits need to be registered within 30 days of the tenancy agreement.

If you take a deposit a year in advance like some agents do then technically it has to be registered. A reservation fee can be taken which is 1 weeks rent but that is the maximum amount. If they are taking a deposit they have to register it.

Get the tenants signature.

Always make sure the tenant signs all documentation including initialling at the end of the document and the relevant parts. You need to keep a copy of this.

In addition, always serve the terms and conditions of the scheme.

Periodic Tenancy

The tenancy has come to an end and is now going onto what is known as a statutory periodic tenancy. Ie a month to month tenancy. A lot of landlords and agents don’t realise you have to serve on the tenant all the documentation again at the end of that term and any term thereafter. So for instance the tenant took the property in 2019 for one year. In 2020 you have to reserve the paperwork. The tenant stays beyond 2020 through to 2021. Ie beyond 2 years. You then have to serve the paperwork again on the anniversary of the tenancy.

Fines.

These are much more heavy than landlords understand. The fines can be anywhere from a minimum of 3 times the deposit and releasing the deposit in its entirety to the tenant. However, what landlords don’t appreciate it could also be potentially fined on every time the renewal would have come round if you didn’t serve the paperwork. So for instance if you didn’t serve the paperwork for 3 years, you could be potentially liable up to 3 times the amount of the deposit, times 3 again plus releasing the deposit itself.

Section 21 notice.

You will not be able to serve a section 21 notice if you haven’t registered the deposit correctly.

Lastly, if you would like a valuation please contact us on 01273 724000 or admin@harringtonslettings.co.uk