Thursday 16th August 2018

Deposits – What TenancyPod Landlords Need To Know

It’s not a legal requirement to take a deposit from your tenants but many landlords choose to.

TenancyPod is here to support landlords, and this guide helps you understand what your responsibilities are if you decide to take a deposit. 

Taking a deposit gives tenants a good incentive to look after the property and means that if there should be any damage – accidental or otherwise – you won’t be left out of pocket when the tenancy comes to an end.

Most landlords take a deposit of between 4 - 6 weeks’ rent and ask for this alongside the first month’s rent. TenancyPod’s comprehensive Rent Protection insurance requires at least one month’s rent to be taken. 

If you have an Assured Shorthold Tenancy (AST) the deposit must be protected with one of the government-approved tenancy deposit schemes within 30 days of receiving it. 

You can choose either custodial protection where you pay the money to the scheme or insurance based where you hold the deposit but must provide any disputed amount to the scheme at the end of the tenancy.

All the schemes offer a free dispute resolution service.

You will also receive confirmation of the protection from the scheme you use. Your TenancyPod account allows you to upload and store this certificate safely, so you can issue it to your tenant when you’re ready. 

It is also a legal requirement to provide your tenant with the ‘prescribed information’ about the deposit protection within 30 days of receiving their deposit. Your scheme should advise on what information you need to provide. You can also upload a copy of this document onto your TenancyPod account to issue to your tenant.

At the end of the tenancy you are entitled to expect the property to be left in a clean condition, but must allow for fair wear and tear. 

The deposit should be returned to the tenant once you’ve carried out a property inspection, are satisfied there’s no damage, and have confirmed there are no outstanding bills or rent arrears.

The tenant does not have the right to withhold the last month’s rent and use the deposit for this, unless you’ve agreed this between you. 

If there’s a dispute regarding deductions then the schemes offer a free dispute resolution service where the outcome is decided by an impartial and qualified adjudicator. The parties can also go to court if they wish but the deposit will remain protected as long as the tenant correctly raised a dispute with the scheme.

TenancyPod is the perfect solution for Property Management and will always keep you updated on any changes to legislation or compliance.

Register for free today, give us a call, or chat with one of our team!