Deposits
- What is a deposit?
- What's the best way of paying a deposit?
- How much is a deposit going to cost me?
- When should I pay it?
- What if I've paid my deposit and moved in only to find the property is not in the state it should be in?
- How can I best make sure that I'm going to get my deposit back at the end of my contract?
- What do I do if the owner doesn't return my deposit?
- Sample Letters to help get your deposit back
- Tenancy Deposit scheme (NEW for 2007)
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
owner/agent may retain your deposit until written proof has been
provided showing that all the utility bills have been paid. This may
include an exemption letter for your council tax bills.
The deposit cannot be used to cover reasonable wear and tear which you have paid for in your rent.
Get a written receipt for your deposit, with details of what it's supposed to cover.
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. You should also receive a statement of what the deposit covers. Attach the receipt to your copy of the contract.
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: 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:
If you are in Scotland and live in a Tenement Flat then you will also have communal responsibilities to clean (and leave free of litter) the stairwell with other tenement occupiers.
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 University or College or a larger owner, they may well have already provided you with a Tenants' Handbook or special End of Tenancy Notes that covers this.
Thirdly, 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 many students 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 students 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:
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Bedroom not properly cleaned |
Clean all communal areas |
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Clean your toilet regularly |
Fridge/freezer not defrosted |
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A kitchen left in very bad condition |
Cooker not cleaned |
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Bag it and bin it |
Vacuum all communal areas |
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An iron burn on the carpet |
Failing to return keys on time |
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 for students 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. 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 University, College or 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 doesn’t return my deposit?
A: Check the following five points:
- Has all the rent been paid? If there is joint liability the owner/agent can deduct outstanding rent from the collective deposit. If you are not jointly liable, you are only responsible for your rent.
- Have all the bills been paid and proof shown to the owner/agent? Strictly speaking, any outstanding bills will never go back to the owner but it is good practice and will speed up the return of your deposit.
- Are there any ‘reasonable’ damage/cleaning charges that the owner could make? If there is joint liability, all rooms in the house must be clean. If there is no joint liability, you are only responsible for your room and the communal areas of the house
- Have all other conditions stipulated by the owner/agent (usually written into the contract) been met? This also includes the timescale for deposit returns. Check your contract.
- Has a letter been sent to the owner/agent requesting the return of the deposits? If so, persist and if that fails, report the matter to us. If not, write to the owner/agent, giving your name, address of where you lived, amount of deposit and where to send the deposit to. Click here for sample letter. Always keep copies
Frequently asked questions about common problems
Q: The owner/agent has only returned part of our deposit. Can they do this?
A: This depends on why it has been withheld. if no reasons have been given, write and request a full breakdown of the deductions within 21 days. Click here for sample letter.
Q: We disagree with the owners/agent’s deductions. What can we do?
A: Write a letter to the owner/agent stating detailed reasons for disagreeing with the deductions (providing proof where necessary and check with your housemates that your facts are correct). Give the owner 14 days to respond.
If you are renting from a University, College or larger supplier then they may be a proper complaints procedure (normally detailed in your tenant information) - use it.
Q: The owner/agent has failed to give any reasons for withholding our deposit. What next?
A: Write a further letter requesting the return of your deposit, giving dates of any previous correspondence with the owner/agent, and giving them 14 days to reply. You should advise them that legal steps will be taken to secure the return of the deposit. If you take this step, contact your Housing Advice Services or Accommodation Office for assistance.
Q: Can I deduct my deposit from my last month’s rent?
A: No, because that would be a breach of your contract. It’s 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.
Q: I am leaving the house a few weeks early can I get my deposit back early?
A: 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.
Q: We cannot afford to pay the final utility bills, can we leave our deposit for the owner/agent to pay them?
A: 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.
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
www.tenancydeposit.gov.uk
or from 26 February 2007
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.