What is a tenancy deposit protection scheme?
Since 2007 all landlords have been required by law to protect deposits for Assured Shorthold Tenancies (AST) in a government approved tenancy deposit protection scheme. Landlords must do this within 30 days of them receiving the deposit and give their tenant’s prescribed information containing details such as where and how the deposit is kept and what will happen with it at the end of the tenancy. Some deposit schemes hold deposits and some insure deposits, but the important thing is that deposits are protected and tenants are provided with the prescribed information in a timely manner.
How does protecting the deposit help?
The scheme was introduced to ensure that landlords and letting agents use deposits correctly and do not withhold them unfairly. If there is a dispute at the end of the tenancy regarding damage or outstanding rent arrears, the deposit can be used to rectify repairs or reduce the debt where a landlord raises a claim that the tenant has broken the terms of their tenancy. Likewise, a tenant can raise a dispute if they feel their landlord is unfairly attempting to withhold their deposit. Both landlords and tenants can receive free, impartial advice from the scheme to resolve such issues.
Changes following the Tenant Fees Act 2019
Since 1 June 2019, a cap on the maximum deposit that a tenant is required to pay at the start of a tenancy has been introduced. If the total annual rent is less than £50,000, the maximum deposit that can be requested is five weeks’ rent. If the annual rent is £50,000 or above, the maximum deposit is six weeks’ rent.
Landlords are also now only able to charge a holding deposit to reserve a property – but it must be refundable and it cannot equate to more than one weeks’ rent. Viewing fees and tenancy set-up fees are also not allowed. Neither are check-out fees. For further information see how to rent.
To find out if your deposit is protected please visit tenancy deposits (shelter.org.uk)
Last updated: 25/07/2022 12:20