Quick Guide - Tenancy Deposits
You don’t have to take a deposit but most landlords do.Â
There are two main types of ‘traditional’ deposit and the new ‘alternative’ schemes.
See brief details below and links to some of our content. You will find the rest linked from the Topic page.
Note that if you are not a Landlord Law member, or have a Basic Membership some of the links will not work for you. To join click here. To upgrade your membership see here.
A ‘traditional’ deposit is where deposit money is paid to the landlord who then has to register the deposit with a government-authorised tenancy deposit scheme. There are three schemes:Â
There are two types of scheme – custodial and insurance-based, as discussed below.Â
There are a number of FAQ which look at various aspects of these schemes:
- Can I charge tenants for cleaning at the end of the tenancy?
- Can landlords legally avoid having to use a tenancy deposit scheme?
- Can the tenancy deposit be used as rent?
- Do I have to use the arbitration service provided by the tenancy deposit scheme?
- Does the landlord need to provide the tenants with copies of receipts for items claimed?
- How do you deal with the tenancy deposit when the tenant vacates?
- How does the free arbitration service work?
- How much money can I take as a deposit from contract holders in Wales?
- How much money can I take as a deposit from tenants?
- Tenant Fees – what are the differences between England and Wales?
- What are Altenative Deposit Schemes, and what do I need to watch out for?
- What are letting agents obligations regarding tenancy deposits?
- What are prohibited payments and what are the penalties?
- What are prohibited payments and what are the penalties? Wales
- What are stakeholders?
- What are the main features of a custodial tenancy deposit scheme?
- What are the main features of an insurance based tenancy deposit scheme?
- What are the penalties for failing to protect a tenancy deposit?
- What are the rules for charging a holding deposit?
- What happens if the agent who holds the deposit, becomes insolvent?
- What if the tenant disappears at the end of the tenancy owing money?
- What if the value of the damage to the property exceeds the deposit money?
- What is ‘fair wear and tear’?
- What is a tenancy deposit?
- What is betterment? (Or how much can I charge a tenant for damaged items?)
- What is the prescribed information?
- What is the tenancy deposit scheme?
- What payments and fees am I entitled to charge my tenant?
- What payments and fees am I entitled to charge my tenant? Wales
- What records do I need to keep?
- When buying a property with sitting tenants, what is the situation regarding deposits?
- Who gets the interest on deposit money?
A custodial deposit scheme is a traditional scheme where the money is held by the scheme and the landlord pays no fee. Â
All three of the schemes offer a custodial scheme now.Â
An insurance-based scheme is where the landlord holds the deposit money and pays a fee to the deposit company. All three traditional deposit schemes offer an insurance-based option.Â
This is information that needs to be served on the tenants within 30 days of receipt of the deposit money.Â
The rules relating to deposits are strict and set out in statute.Â
We have a step by step guide here.
It is now possible to offer an alternative to the traditional deposits – provided the tenant can still pay a traditional deposit if they prefer.
Click here for a YouTube video about one of the alternative schemes.
The law relating to tenancy deposits in Wales is very similar to that in England save that the limit of 5 weeks rent (or 6 weeks where the rent is over £50,000 pa) does not apply.Â
Article:Â
FAQ
