A tenancy deposit is a sum of money that is paid by a tenant to their letting agent or landlord before they move into a rental property. The deposit is held by a third party, such as a deposit protection scheme, and is returned to the tenant at the end of the tenancy, less any deductions agreed upon by both parties.
Tenancy deposits are capped at five weeks' rent. The Tenant Fees Act 2019 also introduced a ban on landlords charging tenants fees for things like referencing, administration, and letting agent fees.
There are three government-approved tenancy deposit schemes in the UK:
- The Tenancy Deposit Scheme (TDS)
- The Deposit Protection Service (DPS)
When a tenant pays their tenancy deposit we, as the managing agent, must register it with one of these schemes within 30 days. Our scheme of choice is the DPS. We receive a certificate as proof and confirmation of the deposit being secured. This is kept on file to refer back to the deposit at the end of the tenancy, should there be any disputes.
At the end of the tenancy, we complete a check-out report on the tenant. This report should list any deductions that the landlord is making from the deposit, such as rent arrears or damage to the property. The tenant then has 14 days to respond to the check-out report.
If the tenant and landlord cannot agree on the deductions, they can refer the dispute to an independent adjudicator. The adjudicator will make a decision on how much of the deposit should be returned to the tenant.
Here are some tips for tenants when it comes to tenancy deposits:
- Make sure that you understand the terms of the tenancy agreement, including the deposit protection scheme that will be used.
- Take photographs and videos of the property before you move in, to document its condition.
- If you have any concerns about the property, raise them with us as soon as possible.
- If you have a dispute with the landlord about the deposit, refer it to an independent adjudicator.
Tenants have a number of rights when it comes to tenancy deposits. These include the right to:
- Know the amount of the deposit
- Know how the deposit will be protected
- Be given a check-out report at the end of the tenancy
- Dispute deductions from the deposit
Tenants should be aware of their rights and should not be afraid to stand up for them. As the managing agent, we will always take a neutral stance when it comes to the deposit and any deductions. We will advise you and your landlord based on the facts available to us from the inventory at the point of move-in, versus the check-out report.
Landlords have a number of responsibilities when it comes to tenancy deposits. As the appointed managing agent, we conduct these on their behalf. These include the right to:
- Take a deposit
- Register the deposit with a government-approved deposit protection scheme
- Serve a check-out report on the tenant at the end of the tenancy
- Make deductions from the deposit for agreed purposes
Landlords should be aware of their responsibilities and should ensure that they comply with the law. If a landlord, and by extension, their managing agent, does not comply with the law, they may be liable to pay compensation to the tenant.
The rules and regulations around tenancy deposits ensure that both landlords and tenants can protect their interests and ensure that the process is fair and transparent.
As one of East Yorkshire's highest-rated letting agents, we are trusted by our clients to handle these matters on their behalf. We bridge the gap between tenant and landlord to provide an impartial service and take away the stresses of deposit management and deposit disputes.
If you have any questions surrounding deposit handling feel free to contact our expert team at 01482 562 562 📞