As a landlord, you are responsible for a lot of things; including the tenancy agreement, legal documentation, and protecting the tenant’s deposit.
In his latest article, Landlord & Tenant Specialist Jason Grimster outlines how deposit protection works and your obligations.
What are the different types of tenancy deposit schemes?
When a landlord rents out a residential property under an Assured Shorthold Tenancy (AST) and a deposit is paid by the tenant, it must be placed in a government approved tenancy deposit scheme.
There are three approved schemes in which a deposit may be protected:
- My Deposits – mydeposits.co.uk
- Tenancy Deposit Scheme – tenancydepositscheme.com
- Deposit Protection Service – depositprotection.com
Do I have to put my tenants deposit in a scheme?
As landlord, any deposit taken from a tenant has to be protected in an approved scheme.
If you don’t protect a tenant’s deposit or fail to notify a tenant of a deposit protection, there can be serious consequences for you and your tenant could make a claim for financial compensation.
Deposit protection is not the only obligation of a landlord. We’ve outlined your ‘Top 10’ most important responsibilities here.
How do I put my tenants deposit in a scheme?
You should contact one of the three deposit protection schemes. They will offer easy to follow guidelines which will help you to protect your tenant’s deposit. Most of the time, protection can be completed online.
Each approved scheme will offer a choice of either a:
- Custodial Scheme: Where the deposit stays with the scheme provider for the duration of the tenancy, or an
- Insured Scheme: Where the scheme provider issues insurance protection for the deposit.
How long can you hold a tenant’s deposit?
A tenant’s deposit is held for the duration of the tenancy, and must be returned within 10 days of the tenancy ending.
You must also register the deposit with a registered scheme within 30 days of receiving it from the tenant.
If you are a new landlord, you might have some more questions such as the costs you’ll be liable to pay, the requirements for letting and more. Read our advice here.
Do landlords legally have to protect deposits?
Yes – landlords are legally obliged to protect a tenant’s deposit.
Failure to do so (and/or failure to notify a tenant of the protection) can lead to serious consequences for you.
In addition to protecting a tenant’s deposit, a landlord must also issue the most recent copy of the How to Rent guide to the tenant at the start of the tenancy. Find out more about the guide and your obligations here.
In the full article, Jason outlines the penalty for not protecting a deposit, how to mitigate claims, the grounds for witholding a tenant’s deposit and more. Click here to read it.