There are 2 types of deposit you may be asked to pay when renting in the private sector:
- HOLDING DEPOSIT
money you pay to reserve a property before signing an agreement - once this is paid the landlord/agent should reserve the property for you and not show it to any other prospective tenants. You might be asked to pay this whilst the landlord is carrying out relevant checks such as references. You should usually get all the holding deposit returned to you unless you decide not to rent the property, you give wrong or false information to the landlord/agent or you do not pass a 'Right to Rent' check. Your money cannot be kept for any other reason.
The maximum amount that can be charged for a HOLDING DEPOSIT is the equivalent of 1 weeks' rent (Monthly rent x 12 ÷ 52 = maximum holding deposit)
- TENANCY DEPOSIT
money paid by the tenant to be held by the landlord as security in case of damage to the property or rent arrears. You should get this money back when your tenancy ends unless the landlord/agent has a legitmate reason to keep some or all of it (for example if you have outsanding rent debts or you have caused damage to the property).
The maximum amount that can be charged for a TENANCY DEPOSIT is the equivalent of 5 weeks rent (Monthly rent x 12 ÷ 52 x 5 = maximum tenancy deposit)
Please contact SU Advice for further advice if you think you have been charged too much
The deposit (or part of the deposit) can be kept by the Landlord if the tenant:
- Leaves the property owing rent
- Causes damage to the property or its contents
- Does not pay their bills
The landlord should not with-hold the deposit because you did something they didn’t approve of or to pay for general wear and tear. The landlord should only keep the amount of deposit that they can prove they have lost. For example, if you paid a £300 deposit and at the end of the tenancy you had left a broken chair that cost £80 to replace, your landlord should only keep back £80 of your deposit and the rest should be returned to you. The landlord should be able to provide receipts as proof of what they have kept your deposit for and any replacements purchased should be like for like (i.e. they should not purchase a chair worth £100 if the original chair was only £80)
For all Assured Shorthold tenancy agreements started on or after the 6th April 2007, when you pay a deposit, your Landlord or Agent must protect it using a government authorised tenancy deposit scheme. These schemes have been set up to ensure your deposit will be protected so that you will get all or part of your deposit back (when you are entitled to it) and to help resolve any disputes between you and your Landlord or Agent.
If you live in the property with your landlord your deposit does not have to be protected by law. However, it is still good practice to do so and you could ask your landlord about this.
Once your deposit has been paid to the Landlord or Agent they are required to give you details about how your deposit is being protected within 14 days. They should inform you of the contact details of the deposit scheme, the contact details of the Landlord or Agent, how to apply for the release of the deposit, the purpose of the deposit and what to do if there is a dispute over the deposit. If none of these details is supplied contact the Landlord or Agent and ask for details about how your deposit is being protected.
The three Tenancy Deposit schemes are:
Zero deposit companies are another option that a landlord or agency might offer as they provide deposit replacement insurance. This is where you are not charged for a deposit upfront but there are often other costs involved that you would not get returned to you at the end of your tenancy. You cannot be forced to use a Zero deposit company but your landlord or agent may give it as an option.
For more information on tenancy deposit protection please see Shelter or book an appointment with an SU Advice Adviser.
Within 14 days of paying your deposit you should receive information about where your deposit is being protected.
If your deposit has not been protected or your landlord or agent has not followed the rules to protect your deposit you can take court action, during or after your tenancy. You may be able to make a claim for compensation of between 1 and 3 times the value of your deposit. You can also claim for your deposit to be protected or to claim a refund of your deposit.
A court can order your landlord to pay compensation if they:
- Fail to protect the deposit
- take longer than 30 days to protect your deposit
- fail to give you details of the scheme used within 30 days
If you would like to take action against your landlord or letting agency then please book an appointment with a SU Advice Adviser to discuss your options.
You can check if your deposit has been protected by checking on the websites of each of the protection schemes: