A tenant’s guide to deposits

It’s standard practice for a landlord or agent to ask you to pay a deposit when you agree to a tenancy. When you leave the property, providing you haven’t caused any damage to the property or failed to pay your rent or bills, you’ll get the deposit back. The deposit gives the landlord or agent some reassurance that he or she won’t end up out of pocket.

What’s tenancy deposit protection?

The deposit is still your money and the landlord or agent has to protect it. There are three approved tenancy deposit protection (TDP) schemes in England and Wales and similar schemes in Scotland and Northern Ireland. Within 30 days of you paying the deposit, your landlord must tell you which scheme your money is in, how to apply to get the deposit back when you leave and details of how to handle any disputes that arise at the end of the tenancy.

When, at the end of the tenancy, the amount of your deposit to be returned is agreed, the landlord has 10 days to return your money.

How much will a deposit be?

The amount can vary but is capped at a maximum of five weeks rent, providing the annual rent is less than £50,000.

Five weeks’ worth of rent can be a considerable sum to find at the start of a tenancy, particularly if you are moving between rented properties and have a deposit still tied up with the expiring tenancy. As a result, some landlords offer the alternative of Deposit Replacement Insurance. Typically, the upfront costs are much less – around one week’s rent in general – but this is a one-off payment that won’t be returned even if you cause no damage to the property. Effectively either you or the landlord will be buying an insurance policy to cover any costs. Note that you cannot be forced to take this option.

What’s a holding deposit?

This is a deposit paid to secure a property before you complete the tenancy agreement. It’s not regulated in the same way, but some agents will convert these deposits into tenancy deposits when the agreements are signed.

This is a joint tenancy. Do we all have to pay separate deposits?

No. Usually, there’s one deposit which the landlord can make deductions from – even if only one of you is responsible for the damage.

What do I do if I suspect the landlord hasn’t protected my deposit?

You can call the TDP schemes to check. All the details are online here.

What happens if there’s a dispute?

Firstly, try to avoid a dispute. A good relationship with the landlord helps. Check the inventory when you move in and make sure you’re happy with it before you sign. When you’re ready to move on at the end of the tenancy, make sure the property is clean and in a condition which matches that at the start of the agreement. Give yourself plenty of time to spruce things up if needs be and check again with the inventory.

If when you check-out there are issues raised, make sure you have evidence to back your claim. Put it in writing and if you’re not happy with the outcome you can make use of your TDP scheme’s free dispute resolution service. Contact the relevant schema as soon as possible as there may be a time limit for raising a dispute.

More info?

Most landlords and agents will be happy to help with the basics. If you want more information about deposits, the TDP schemes are a great source of help. You can also get in touch with your local Citizens Advice branch.