How deposits work
Deposits are often a cause for confusion, so here is our guide to how they work.
THE LAW ON DEPOSITS
We ask for a deposit equivalent to a month’s rent on all tenancies.
By law the deposit must be lodged with a government-approved tenancy deposit scheme, ensuring that they are not unfairly held back by landlords or their agents, and the tenants must be given a Certificate to show where the deposit is held before their tenancy begins.
The scheme we are signed up to is TDS.
Landlords are free to arrange the deposit lodging for themselves, but are still subject to the same legal requirements. We must receive details of the scheme before handing over any deposit monies to a landlord.
DEPOSITS, BREAKAGES & DILAPIDATIONS
Whether we lodge the deposit or the landlord does, we insist that an accurate Inventory/Schedule of Condition is compiled at start of the tenancy to avoid deposit disputes at a later date. This document is used as a benchmark when the property is vacated.
In accordance with deposit legislation, any deductions from a deposit must be agreed with the tenants in writing or passed to the relevant deposit scheme to be resolved via an independent arbitrator, if tenants agreement is not obtained.
Any dispute at the end of the tenancy has to be settled in accordance with the scheme and any disputed amount has to be sent to the deposit regulator with any undisputed amounts having to be returned to the tenant whilst the remaining dispute is settled, subject to the timescales dictated by the deposit legislation
It is important to note that a protected deposit belongs to the tenant and a deduction can only be made if agreed in writing with the tenant. A landlord should not therefore underestimate the importance of a comprehensive inventory/Schedule of condition to reduce the liklihood of a future dispute.
We advise that at no time should a deposit held be used to cover a shortfall in rent as this does not allow provision for any breakages or damages at the end of the tenancy and is not always viewed favourably under Deposit Protection Legislation.
COST OF LODGING THE DEPOSIT
Lodging the deposit is included as part of the fee with our Letting & Management service, and charged at £60 Incl vat with our Simply Letting service.
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