Deposits

Q: What is a deposit?

A: A deposit is a returnable sum payable to the owner/agent. It is normally held against any end-of-tenancy rent arrears, wilful damage and any essential cleaning. It usually covers

damage to the property or its fitting in excess of wear and tear
the cost of cleaning necessary to return the property to a lettable condition
damage to decor
the cost of removing large amounts of waste from the property
the cost of replacing locks or keys if keys are not promptly returned
any outstanding rent

The deposit cannot be used to cover reasonable wear and tear which you have paid for in your rent.

Since April 2007, all deposits taken as part of an Assured Shorthold Tenancy have to be protected by one of three government authorised Tenancy Deposit Protection (TDP) schemes. Please see section below on TDP schemes for more details.

Q: What's the best way of paying a deposit?

A: Always pay your deposit by cheque or credit card (because then you can prove payment in the event of any dispute) and get a receipt, which states the amount paid. YIf your deposit is protected by one of the TDP schemes then the landlord or agent is required to give you details about how your deposit is protected within 14 days of the deposit being paid. This should include:

The contact details of the Tenancy Deposit Scheme
The contact details of the landlord or agent
How to apply for the release of the tenant
Information explaining the purpose of the deposit
What to do if there is a dispute about the deposit

If you don't get the above information, ask your landlord or agent the simple question - 'how is my deposit protected?'

Q: How much is a deposit going to cost me?

A: This will depend on where you’re living, but reckon on it being in the region of a month’s rent (although you must not treat it as your last month’s rent when you are approaching the end of your tenancy - rent and deposits are totally separate matters. Click here to find out why not.

Q: When should I pay it?

A: Not until the contract has been signed.

Q: What if I’ve paid my deposit and moved in only to find the property is not in the state it should be in?

A: If you are unhappy about any aspect of the condition of the property when you move in (damage, outstanding repairs, damage to decor or the level of cleanliness) – inform the owner/agent in writing immediately and keep a copy for your own records. If you fail to notify them about your concerns then you could find yourself paying for the previous tenants’ damage at the end of your own tenancy.

Q: How can I best make sure that I’m going to get my deposit back at the end of my contract?

A: The introduction of Tenancy Deposit Protection should make it easier to get your deposit back, however you do have a responsibility to return the property in the same condition that it was let to you, allowing for fair wear and tear. So it is a good idea to make sure that when you sign your tenancy agreement you:

Keep a detailed list of contents (furniture and fittings)
Record the condition of the property and its contents (photographs are a good idea)
Check the circumstances in which your landlord or agent could have a claim on your deposit

so first, protect your deposit. There are many legitimate reasons why deductions may be made from your deposit. Click here for some tips on how to help avoid problems:

Second, arrange an inspection. Three weeks before your tenancy ends make sure that you have an end-of-tenancy inspection visit by the owner/agent. Ideally you should be present at that visit so that you can agree any work that you need to do with the owner/agent.

Before the inspection ask the owner/agent for a checklist of what they expect you to do If you are renting from a larger owner, they may well have already provided you with a Tenants' Handbook or special End of Tenancy Notes that covers this.

Third, if you are paying energy, telephone and water charges, sort out the utility bills. Two weeks before you are due to move out you should contact all the utility companies (gas/electricity/telephone) and arrange for final readings to be taken. It is your responsibility to inform the utility companies that you are moving out and to request that your name be removed from the bills.

Fourth, make sure everyone does their fair share. If you are renting a shared house then you should leave the property in a fit state for the next set of tenants to move in. If you have signed a joint contract (as some professionals do) then you are jointly responsible for the whole house and it is important that the whole house is cleaned and left in a good condition.

It is important that every occupant does his or her fair share of work. Avoid individual occupants leaving one by one towards the end of the tenancy and so leaving cleaning to one or two remaining tenants. Work out in advance who will clean what. Most people will clean their own bedroom but make sure you divide the responsibilities between yourselves for living rooms, kitchens, bathrooms, corridors, cellars and gardens. Generally, cleaning and clearing the kitchen and bathroom in a house is 50% of the task of cleaning the whole house.

Allow yourself plenty of time to clean the house at the end of the year.

Never have an end of house party on the last day. Always leave at least three days after any social event to clean up and move out.

Click here for a Deposit Inspection Checklist.

Examples of common deposit deductions

To give you an idea of what an owner will expect:


Bedroom not properly cleaned cleaning the room would cost about £20 and moving the furniture back to the appropriate room could cost a further £20-£30.	Clean all communal areas To clean up the coffee stains and remove the rubbish from this table could cost £5. There also may be a call out charge.

Clean your toilet regularly This could cost £40 to descale otherwise.	Fridge/freezer not defrosted to have this defrosted, the water mopped up and wiped clean would cost about £40.

A kitchen left in very bad condition To return this kitchen to a good condition would cost about £120.	Cooker not cleaned To clean a cooker in a very bad condition can cost up to £60.

Bag it and bin it This would cost you over £60 to remove.	Vacuum all communal areas This corridor could cost £20 to have cleaned commercially. Have you used any fire equipment inappropriately - these fire extinguishers cost £30 each to refill.

An iron burn on the carpet If an ironing board is provided then any iron burn is entirely your fault. Iron burns on new carpets or in the centre of any carpet will mean paying for a new carpet - it is never possible to "patch" a carpet. The cost of a carpet will vary according to the size of the room and the type of carpet, but in the carpet is of industrial contract quality then a cost of £200-£400 is possible.	Failing to return keys on time The cost of replacing a key (depending on whether it is a suited system) can be between £10 - £30. If a number of keys are not returned or there is a security implication then the locks and all keys may have to be replaced at very short notice (for incoming tenants) and this can cost around £200.

Other things to remember

Many agents and owners manage large portfolios and will employ cleaners, builders and others to do any work for them, so they will be paying for any effort involved in returning the property to a habitable condition. They will pass on this cost (often together with an administrative charge) to you. In addition, people working on the property will have to collect a key from the agent/owner, will have travel costs to the property, the cost of their work plus (in most cases) VAT to pay at 17.5%
It is not unusual to seriously underestimate the cost of simple cleaning jobs
The owner/agent can take action against the household if the costs of returning the property to a fit condition exceed the total amount paid in deposits.
Return the keys on the day you move out. Any late returns may result in a charge for changing the locks, or further rent being charged until the keys are returned. Do not give the keys to one tenant to return; if they lose them everyone will be responsible.
Finally, if the house had light bulbs provided when you moved in then check they all work when you leave. Empty the vacuum cleaner and make sure that your bagged rubbish will be collected by your local refuse collector. Click here for local details. Leaving rubbish for the owner/ agent to remove means that they have to pay for a trade waste collection (rather than your domestic residential collection which is free), and this will be very expensive.
If you are renting from a larger provider, there may be set charges for undertaking works in default that are given to you at the beginning of the tenancy in a schedule as part of your contract. Unreasonable charges (even if set in advance) can be challenged, but generally, set charges work in favour of the tenant because they limit actual costs to those outlined.

Q: What do I do if the owner hasn't protected my deposit?

A: If this is the case you can apply to your local county court. The court can order the landlord or agent to either repay the deposit to you or protect it in a scheme. If your landlord has not protected your deposit, they will be ordered to repay three times the amount of the deposit to you.

Frequently asked questions about deposit returns

How long will it take to get my deposit back?

You should receive the agreed amount of deposit within 10 days of the end of your tenancy OR notification that money is to be withheld. At the end, check whether you are leaving the property and its contents in the condition which it was left to you - allowing for fair wear and tear. - and check you have paid your rent and any other expenses. then agree with your landlord or agent how much of the deposit should be returned to you.

We disagree with the owners/agent’s deductions. What can we do?

If you and your landlord cannot agree how much of your deposit should be returned there will be a free service offered by the scheme protecting your deposit to help resolve the dispute. Check the information your landlord or agent gave you at the beginning of your tenancy.

Can I deduct my deposit from my last month’s rent?

No, because that would be a breach of your contract. It is important to keep rent and deposits quite separate. If you are in dispute or feel you are owed money by the owner/agent then seek advice before taking further action.

I am leaving the house a few weeks early can I get my deposit back early?

If it’s a joint tenancy the answer is no. The owner/agent will obviously want to inspect the house and check all rent is paid etc before returning deposits. If there is no joint contract, it may be possible for you to come to an arrangement for the early return of the deposit.

We cannot afford to pay the final utility bills, can we leave our deposit for the owner/agent to pay them?

No, not if the bills are in the names of the tenants – the utility companies will chase the named persons and not the owner/agent. If you share a house with the owner then an agreement could be reached for the bills to be taken from the deposit. Request a copy of the bills to ensure you are paying the correct amount.

My landlord wants to charge an administration charge instead of a deposit as he does not want to get involved in the Tenancy Deposit Scheme, instead he has stated that he will bill me at the end of the tenancy for any damages. Is this reasonable?

In summary, a landlord does not have to take a deposit and can make charges at the end of the tenancy. Another slight twist on this would be a situation where a landlord makes an "administration charge" at the beginning of the tenancy. There have been incidences of landlords charging an administration fee to cover advertising, drawing up contracts etc., on the understanding that none of it would be returned at the end of the agreement and the landlord would cover any damages.

Section 212(8) of the Housing Act 2004 states that "tenancy deposit, in relation to an assured short hold tenancy, means any money intended to be held (by the landlord or otherwise) as security for -

(a) The performance of any obligations to the tenant

(b) The discharge of any liability of his

arising under or in connection with the tenancy.

One of the items covered by the 'admin charge' is as follows: "any repairs or replacement of broken items in the house (i. e hoover/iron/ironing table, etc) which normally would get deducted as expenses from the tenant's deposit, will now be repaired or replaced at the landlord's own expense."

What needs to be established is whether the item referred to above - and, indeed, any of the other items constituting the "administration charge" - is paid to the landlord with an expectation that all or any of it will be refunded at the end of the tenancy. If it is, then it must be treated as a tenancy deposit and protected under a scheme. If, however, it is non-refundable then it is not a deposit. The tenancy agreement should make clear which items constituting the admin charge will be refundable.

Sample Letters

Click here for a sample letter requesting your deposits are returned.

Click here for a sample letter requesting a breakdown of the reasons why deductions were made from returned deposits.

Tenant Deposit Scheme

Tenants stand to benefit from enhanced security and peace of mind following the introduction of the Tenancy Deposit Protection scheme (TDP), which will offer a faster, cheaper and fairer way of settling any disputes over the return of deposits in the private rental sector.

From 6 April 2007, landlords entering into new tenancy agreements will be required to place any deposit with a Government authorised scheme, which will safeguard the money and offer independent adjudication in the event of any dispute. Tenants who have kept their rented property in good condition can be confident that they will not have all or part of their deposit withheld on spurious grounds, a common complaint currently made by tenants.

The existence of the alternative dispute resolution service (ADR) will also encourage tenants and landlords to have in place, from the outset, clear agreement on the condition of the property through use of inventories, and agreement on the condition of the property – thus ensuring that landlords are also protected.

TDP will apply to all assured shorthold tenancies (ASTs) in England and Wales, where a deposit is taken. Virtually all new contracts to let a property are ASTs. A contract that is an AST will be clearly marked as one. The TDP will add to the measures set out in the Housing Act 2004 to drive up standards in the private rented sector, including licensing multiple occupancy homes and new safety rules.

For further information visit www.direct.gov.uk/tenancydeposit .

Useful leaflets on the Tenancy Deposit Scheme

You can download a useful leaflet on the tenancy deposit scheme by clicking either landlord or tenant. Both of these leaflets will give you important information on the scheme and what it will mean for you as a tenant or as a landlord.

You can also find further advice on the tenant deposit scheme and a special Q & A section by clicking here .