Paying a deposit is part of the process of renting a property. It can be anything from £500 to 3 months rent but in most cases it is one months rent. This a sizeable sum for many people who have probably saved up over a period of time or in some cases borrowed off family or friends. This money is usually given to the letting agent or directly to the landlord. Its purpose is to cover breakages, rent arrears and unpaid bills during the tenancy period.
What you need to know is who is holding your deposit…?
The good news for tenants is that since April 2007, when you sign an (AST) assured short-hold tenancy your landlord must place your deposit in 1 of 3 deposit protection (TDP) schemes:
- Deposit protection service
- MyDeposits
- Tenancy deposit scheme
The purpose of these government backed schemes is to ensure to the tenants that they get their deposit back if they:
- Meet the terms of your tenancy agreement
- Don’t damage the property
- Pay your rent and bills
Landlords and letting agents receiving a deposit have a lawful obligation to:
- protect the deposit within 30 days
- serve the prescribed information to the tenants in this time limit
- to protect the deposit throughout the entire time the tenants occupy the property
- abide by the terms of the tenancy deposit scheme
Tenancy deposit breaches by the landlord or agent can result in penalties such as having to pay the tenant compensation of between 1 and 3 times the amount of your deposit.
It could also:
- invalidate a section 21 notice
- forcing a landlord to refund your deposit in full before they can use a section 21 notice
These rules are here to protect you and your deposit. There are strict procedures that must be followed by your landlord or agent to ensure the deposit is protected. The idea to weed out those unscrupulous landlords and to also make the returning of the deposit more fairer process as from before. At the end of the day this is your money and you must check to see who has your deposit and how it is protected. You don’t want it getting into the wrong hands or being misused inappropriately.
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