New guidance on tenancy deposits, disputes and damages
A new guide on tenancy deposits, disputes and damages has been jointly published by all three government authorised tenancy deposit protection schemes.
The guide covers items, such as the collation of evidence and what an adjudicator looks for when considering a dispute. It also outlines the principles on which scheme adjudicators make decisions so that the process is consistent and transparent for letting agent, landlord and tenant alike.
Charging deposits and tenancy deposit law
You may ask the tenant to pay a deposit before moving into your property. This can act as security in case the tenant leaves the property owing rent and/or be used to pay for any damage and/or missing items at the end of the tenancy.
However, since 6 April 2007, at the start of a new tenancy, any rent deposits taken from tenants by landlords or letting agents must be protected by a government authorised tenancy deposit scheme. This will protect both you and the tenant and help resolve any disputes.
Why protect deposits?
Deposits are protected to ensure that:
- tenants get all or part of their deposit back when they are entitled to it
- any disputes between tenants and landlords can be resolved fairly
- tenants are motivated to look after the property
Deposit schemes
At the beginning of a new tenancy agreement the tenant pays their deposit to their landlord or agent as usual. The landlord or agent must then ensure that the deposit is placed into either a custodial or insurance-based protection scheme.
Custodial Schemes
The Deposit Protection Service (DPS) allows you to put a tenant’s deposit into a scheme at the beginning of a tenancy. The deposit is then held by the scheme, free of charge, until repayment of the deposit has been agreed at the end of the tenancy.
Please click here to find out more about the
DPS scheme.
Insurance-based schemes
Insurance-based schemes allow you to keep a tenant’s deposit. You must however pay the scheme to insure yourself against failing to repay the tenant all money due to them.
Protecting the deposit
Within 14 days of taking a damage deposit you must provide your tenant with details of how their deposit is being protected. This must include:
- contact details for the tenancy deposit scheme
- landlord contact details
- an explanation of the purpose of the deposit
- details of how to apply for the release of the deposit
- details of what to do if a dispute arises concerning the deposit
The tenant may also be reminded that they have a responsibility to return the property to its’ original state when their tenancy ends.
Moving Out
At the end of a tenancy the condition and contents of the property should be checked against the agreement made at the start of the tenancy. You then decide how much of the deposit should be returned to the tenant. If both parties agree, the agreed amount must be returned to the tenant within 10 days.
Resolving disputes
If an agreement cannot be reached as to how much of a deposit should be returned to a tenant your protection scheme will resolve the dispute; free of charge.
A new guide has been publishes on tenancy deposits, disputes and damages.
Click here to download.