Private Tenancies – paying a deposit
Paying a deposit
Most private landlords ask newtenants to pay a deposit, although
they don’t have to do so. Althoughthere is legally no limit on the amountthat can be charged, landlords orletting agents usually ask for theequivalentof one month’s rent. Adeposit gives your landlord somesecurity against any financial losss/he may suffer as a result of any
damage you may cause to theproperty, or any unpaid rent.
If you move out leaving unpaidbills for water, gas or electricity, itwill be up to the utility company topursue you and any other users forthe debt. Your landlord should not
deduct money from your depositto cover bills unless s/he suffersfinancial loss, for example, in havingto pay for the installation of a prepaymentmeter or to reconnectservices. If the bills remained inyour landlord’s name and you hadan agreement to pay them, thesituation may be more complicatedand you should get advice.
It is important to remember thatthe deposit remains your money andshould be returned to you unless yourlandlord can prove s/he has suffereda financial loss.
Your landlord cannot withholdyour deposit for general ‘wear andtear’ while you have been living in theproperty. The amount of wear andtear occurring will largely dependon the condition of the propertywhen you move in and the length oftime you live there. Private landlordswould be expected to redecorateand replace carpets and furnishingsevery few years, recovering the costthrough the rent they charge.
You should only be held liable forany damage that creates additionalcosts for your landlord.
Also, youwill only be liable for the value ofrepairing or replacing any damageditem, not the cost of the item brandnew (for example, if your landlordsupplies an old television set and it
gets damaged, you would be liable toreplace it ‘like for like’ rather than withthe latest model).
Before you agree to pay a deposityou should ask your landlord toconfirm in writing:
n exactly what the deposit covers(for example, whether it coversunpaid rent and/or loss causedby any damage).
From 6 April 2007 any newdeposits taken from private tenantson assured shorthold tenancies (themost common kind of tenancy) mustbe placed in a government-approved
scheme. If you signed a new tenancyagreement after 6 April 2007 and paida deposit, you should ask yourlandlord whether your deposit isprotected and which scheme it is in.
Your landlord must place yourdeposit in a protected scheme within14 days of receiving it. S/he must alsoinform you within 14 days:
n which tenancy deposit schemes/he is using and the contactdetails for the scheme
n what you can do if there is adispute about the deposit
n information about the purposeof a tenancy deposit
n how your money will be returnedto you at the end of your tenancy.
If your deposit has not beenprotected, or if you have not beeninformed, your landlord may have torepay you three times the amount ofthe original deposit in compensation.
Other charges
Some landlords and letting agentsmay also ask you to make otherpayments before moving in. Beforeyou pay anything, check carefullywhat the payment is for and whetheror not it will be returned. You maybe asked to pay a ‘holding deposit’and/or fees for setting up a tenancy.
You will usually have to pay rent inadvance of moving in. If you areasked to provide details of someonewho can act as your ‘guarantor’,get advice and be clear aboutany responsibility they would beexpected to take on.
Holding deposits
A landlord or letting agent may askyou to pay a holding deposit if youhave agreed to rent a particularproperty but have not yet signedthe contract or moved in. This maybe necessary if you want to rent aproperty that has not yet becomevacant, or if you are a student and
don’t need to move in until you returnto university. In paying a holdingdeposit you are guaranteeing thatyou will take up the tenancy, and thelandlord or agent is guaranteeing to
let it to you. You should not pay themoney unless you are sure you wantthat particular property.
Insist on having writtenconfirmation as to whether theholding deposit will be returnedonce you move in, or whether it willbe used as part of a deposit on yourtenancy once you have moved in.
You may pay a holding deposit andfind you are unable to move in onthe date your landlord had agreed,because, for example, the previoustenants have not moved out or yourlandlord has not carried out repairs s/he had agreed to do. If this happensand you no longer want the property,or you have to find somewhereelse to live, insist on having yourmoney refunded. If the landlord oragent will not return your money,you may be able to take action inthe county court
It is important that you haveconfirmation of what the holdingdeposit covers. If it is to be used
as part of your tenancy depositwhen you have moved in, it will besubject to deposit protection fromthat point (see above). Holdingdeposits which relate only to the
reservation of the property and notto the tenancy agreement are notcovered by the protection rules.
Fees
Landlords and letting agents maycharge fees once they have foundyou a specific place to live and youhave agreed to accept it. They arenot allowed to charge you just for
registering with them. You shouldn’tpay to go on their books or for detailsof places they have to let.If an agency asks for cash inadvance of finding you a home,get advice before paying.
Once you have accepted aproperty, you may also have topay a fee for having your tenancy
agreement or inventory drawn up.You are not likely to have such feesreturned.
Rent in advance
Most landlords ask for rent to be paidin advance. If you pay rent monthly,you will usually have to pay for the firstmonth before you move in. Geta receipt to show the amount you
have paid and check when yourrent is next due.
If you will be claiming housingbenefit to pay your rent, it will bepaid in arrears. You may be ableto apply to the Social Fund for abudgetingor crisis loan to payrent in advance, but payments arediscretionary and depend on yourcircumstances. Get advice if youneed help making an application.
How can I find accommodationwithout a deposit?
If you do not have the money to payfor a deposit, there may be a ‘depositguarantee scheme’ in your area.
Instead of paying a depositupfront, some schemes operate byproviding a ‘bond’ to your landlord.
If your landlord claims s/he hassuffered financial loss when you leave,the scheme will adjudicate and maypay a sum to your landlord if his/herclaim is valid. Some schemes will
have a list of landlords who can offeraccommodation; in other areas, youmay have to find a landlordyourself.
Getting an inventory
When you move in, your landlordshould provide an inventory. This isa list of the contents
which shouldspecify the condition of the propertyand any items provided with it.
Check this carefully to make sure itis accurate and that everything is inworking order. Make a note of thestate of decoration, anything that’sdamaged, any marks, scratches,or burns to furnishings, and noteanything that’s about to wear out.
Agree any changes to the inventorywith your landlord. You should bothsign it and keep a copy.If you don’t have the co-operationof your landlord, do an inventoryyourself with an independentwitness, such as a friend. Ask yourwitness to sign and date that it’sa true record of the condition ofthe property. If anything is worn,broken, damaged, or about to fall
apart, report it in writing to yourlandlordstraightaway and keepa copy. It’s a good idea to takephotographs to record the conditionof the property when you move in.
Any furniture supplied by yourlandlord must meet with standardsfor fire safety. If appliances areprovided, such as a cooker orwashing machine, they must besafe and in working order. If youare concerned that this is not thecase, and your landlord or lettingagent fails to repair or replace them,you can contact Trading Standardswho have a responsibility to ensure
that fire resistance and safetyrequirements are met
Keeping records
If you want to change or replaceanything in the property, contact yourlandlord and confirm in writing whathas been agreed. This may includeredecoration, or any items of furniture
you don’t need and would like to getrid of. If you damage something andneed to replace it, discuss this withyour landlord. Keep a record of theagreement you reach and hold on to
any receipts.If you pay your rent weekly,your landlord is legally obliged toprovide you with a rent book. If youpay in cash, always ask for andkeep the receipt. Bank recordsare a good way of keeping a noteof payments you make by chequeor standing order. If your rent is
paid direct to your landlord byhousing benefit, you should keepall letters and statements so youhave a record of the payments yourlandlord receives. In all cases, it isimportant that you can show whatpayments you have made, in caseyour landlord keeps your deposit,claiming that you owe rent.
I want to leave beforemy contract ends
If your tenancy agreement is for aspecific period of time (known as afixed-term contract)
you are legallyobliged to pay rent until the end ofthat period unless the contract says
you can leave early, or your landlordagrees that you can do so. In eithercase, it is likely that you will haveto give a certain amount of writtennotice.If you leave before the endof your contract without yourlandlord’s agreement, s/he canrecover rent that’s due up to thedate your contract runs out, evenif you have given notice. If you donot pay, s/he could make a claimfor damages (compensation) forbreach of contract in the countycourt. The landlord is not obligedto limit any financial loss by findinga new tenant for the remainder ofthe fixed term. All you can do is tryto find a new tenant who is likely tobe acceptable to the landlord, andask the landlord to agree to re-letthe property to that person. If thelandlord unreasonably refuses todo so, you may have a defence to aclaim for part of the rent. In practice,the best course is to try to negotiatean agreement with your landlordto release you from your tenancy.
If your tenancy is periodic (thismeans it runs from week to week ormonth to month), you can end it bygiving the correct period of notice.
For the notice to be valid, it shouldrun out on the date your rent is nextdue, or the day before, and should befor at least four weeks, or equivalentto the period for which you pay rent, iflonger. If your contract states that youmust give a longer period of notice,then this will be the case. If you leavewithout giving notice, you will beliable for the rent which would have
been due; for example, a month’s rentif you should have given a month’snotice. Your landlord will have a rightto deduct this amount from yourdeposit. This issue is complicated so,if you are in this situation, get advice.
If you are intending to leave anassured shorthold tenancy on thedate a fixed-term contract ends, youare not obliged to give notice unlessyour contract says you must, but it isgood practice to do so.
Can I withhold rent in casemy deposit isn’t returned?
With the introduction of depositprotection schemes tenants shouldno longer feel the need to withholdtheir last month’s rent, out of fearthat their landlord will not return theirdeposit. Tenants are legally obligedto pay rent up to the end of thetenancy and your landlord could takeyou to court to recover this money.There are financial consequences ifyou decide to withhold rent and if youare considering doing this you shouldseek advice.
Moving out
Your landlord or agent should carryout another inventory and checkit against the one taken when youmoved in. You should insist that yourlandlord or agent meets you to gothrough the inventory at the time youmove out, so that any problems withthe condition of the property can beidentified and agreed at this point.
If your landlord won’t do aninventory when you move out, oruntil after you have left, carry it outyourself with an independent witness.
Note any damage caused since youmoved in. Remember, a depositprotects your landlord againstany loss incurred by damage, notnormal wear and tear
Although it is not a legalrequirement, tenancy agreementsoften state that carpets and curtainsmust be cleaned to a certainstandard before the tenant movesout. If you had to accept sucha clause when you signed youragreement, you will have to do thecleaning or may lose some of yourdeposit. Bear in mind that you areonly required to put right any damage,or clean any items soiled, abovenormal wear and tear; not improvethem beyond the condition they werein when your tenancy began. Keeprecords and receipts for any work
you do or pay for before leaving.
What should I get backwhen I leave?
The deposit that you paid shouldbe returned. Both you and yourlandlord must agree on the amountto be returned before the deposit isreleased. Your landlord can makereasonable deductions for anydamage to the property, unpaid rentor missing items, but the balance
should be returned to you when youmove out, or within a reasonableperiod . You will not
lose the right to have the rest of yourdeposit repaid if your landlord hasa valid reason for deducting part ofit (
Your landlord may try to withholdsome, or all, of your deposit onthe basis that you did somethingwhich was in breach of contract; forexample, if you had a noisy partywhen your contract stated you couldnot. Whether or not you have brokenthe contract, your landlord can onlyclaim for any financial loss s/he hasactually suffered. If you are worriedabout this, get advice.
Your landlord cannot deductcosts for re-letting the property,such as advertising or agency
fees, unless this is stated in yourcontract or you leave the tenancy
Agency fees and rent paid inadvance are not returnable.If you and your landlord are in
dispute, the alternative disputeresolution (ADR) service will considerthese points in deciding whetherthe amount withheld is
My landlord will not returnmy deposit in full to me
At the end of your tenancy both youand your landlord must agree on theamount of the deposit to be returnedto you.
Your landlord or letting agent mustpay your deposit money to you within10 days of agreeing the amount to bereturned. If your deposit is held in theDeposit Protection Scheme your
deposit will be returned to you directfrom the scheme, plus any interest,within 10 days. If your landlord hasplaced your deposit in either of theother schemes (MyDeposits and
the Tenancy Deposit Scheme), yourlandlord must return your depositto you. If you have not received yourdeposit within ten days of reachingan agreement you should contact the
scheme provider. MyDeposits andthe Tenancy Deposit Scheme willthen pay you your agreed deposit ifyour landlord refuses to do so.
Your landlord cannot keep yourmoney without your consent. Both ofyou must sign to release the agreedamount of the deposit. If you can’tagree on the amount to be returnedyou can use the alternative disputeresolution (ADR) service attached tothe deposit protection scheme.Unlike the small claims court, ADRis free to use and should be moreefficient. It will specialise in handlingdeposit disputes.
When a dispute occurs, and iflandlord and tenant both agree to usethe ADR service, you will also haveagreed to be bound by its decisionwith no recourse to the courts.
My landlord won’tco-operate with ADR
If you can prove that your landlordrefuses to take part in ADR or reach asettlement through the small claimscourt, you will be able to accessyour deposit money without theiragreement. Keep evidence of yourattempts to make contact with themover a period of time, and the relevantscheme will also have evidence oftheir own failed attempts to contactthem. You should seek advice if thishappens.
In the Deposit Protection Scheme,where a landlord or tenant does notco-operate in order to release thedeposit, ie by not agreeing to therelease of full or part of the deposit;and not agreeing to resolve thedispute through ADR or court, ADRwill be the default way in which to
resolve a dispute.
In MyDeposits and the TenancyDeposit schemes, where the landlordis contactable by the scheme butrefuses to co-operate by choosingADR or the courts, the case must be
referred to the scheme to be resolvedthrough its ADR service.
If the landlord fails to transfer thedisputed amount into the scheme,the scheme will pay you following theADR service’s or court’s decision.
My landlord is not contactable
In the situation where your landlorddisappears and it is not possible toget their agreement over the returnof your deposit you will be able toaccess the deposit without their
signature. Similarly, if your landlordor the scheme provider can provethat a tenant is no longer contactablethe deposit can be released to thelandlord for any damages claimed.
Where this is the case, there needsto be proof that either party is notcontactable.