What Landlords Need To Know About Tenancy Deposits
When a tenant signs up to a new tenancy, most landlords will request they pay a tenancy deposit. It is required by law and the responsibility of the landlord to protect the deposit through a government-backed tenancy deposit scheme (TDP).
In England and Wales, there are three such schemes your deposit can be registered with:
These government-approved schemes will make sure that tenants get their deposit back if they:
- meet the terms of the tenancy agreement
- don’t damage the property
- pay their rent and bills
The landlord or lettings agent is required by these approved schemes to serve Prescribed Information (details of the scheme and the tenancy) to the tenant and must put the deposit in the scheme within 30 days of receiving it.
Deposit protection options
With the exception of those in Scotland, all of these government-approved schemes offer two deposit protection options:
- Custodial scheme – most letting agents use this option, which is free to use and keeps the tenant’s deposit safely in a secure bank account. Under this option, landlords or tenants cannot access the deposit until the end of the contract.
- Insurance scheme – with this scheme, the landlord pays a small fee to protect each deposit, but then keeps the tenant’s deposit in their bank account during the tenancy, accruing any interest during that period. In this option, at the end of the tenancy, the landlord can deal directly with the tenant and he/she can give the deposit back in full, or deduct from the deposit things such as unpaid rent, or cleaning costs, provided the tenant has breached the terms of the tenancy agreement.
At the end of tenancy
Landlords must return the deposit to tenants within 10 days of the end of a tenancy. The amount depends on how much you both have agreed the tenant will get back. If there’s a dispute, then the tenant’s deposit will be protected in the TDP scheme until the issue is settled.
We normally collect a security deposit from the tenant. If the property is managed by KeyRing Lettings, it will be registered by us with The Deposit Protection Service on your behalf. At the end of the letting, this is returned to the tenant, less any deductions made to cover breaches of the Agreement. This means we will be unable to refund all or part of the deposit to the tenant without your consent. Similarly, we are unable to deduct monies from the deposit without the tenant’s consent. We have a procedure for dealing with disputes about the deposit and we will always use every endeavour to settle matters quickly and satisfactorily.
KeyRing Lettings is 100% dedicated to lettings and aims to give the highest level of service possible for landlords and tenants throughout the Mendip area. Contact us to find out more about our services.