You don’t have to take a deposit but most landlords do.
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.
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:
There are two types of scheme - custodial and insurance-based, as discussed below.
There are a number of FAQ which look at various aspects of these schemes:
A custodial deposit scheme is a traditional scheme where the money is held by the scheme and the landlord pays no fee.
All three of the schemes offer a custodial scheme now.
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.
This is information that needs to be served on the tenants within 30 days of receipt of the deposit money.
The rules relating to deposits are strict and set out in statute.
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.