A Tenants Deposit is a fund of either four-, or five weeks equivalent as a fall-back security fund designed to be held in the case of issues during a tenancy, whether it be missing items, damages, or other related issues.
I mention four, or five-weeks equivalent as a tenants deposit, as in the UK, five week’s deposit equivalent is the maximum a landlord is legally able to take for a rented residential tenancy.
Tenants Deposit, 4 Life Saver Rules On How Best To Secure It!
1. How Do I Take The Tenants Deposit?
It’s best to take payment via a platform you can keep a record of it, ideally via direct bank transfer or card payment. Taking a deposit in cash is possible, however, we wouldn’t advise it as it is the least secure form of payment.
2. Where Do I Keep The Tenants Deposit?
The simple answer, the deposit doesn’t sit under your mattress, or in your piggy bank.
This is a legal requirement with all privately rented property and is required to be secured with tenants deposit protection service within 30 days of the tenancy start date.
If you don’t secure the tenants deposit as per the requirements, you’ll be liable to pay the whole deposit back to the tenants immediately, which will leave you with nothing to fall back on in case of any deductions.
3. What Deductions Can Be Made From A Tenants Deposit?
This is a very broad subject, most issues relating to a tenancy can be claimed to be charged as a deduction.
As the maximum deposit, you’re allowed to take is five-weeks equivalent, claiming for rent arrears much more than a month will end up in seeing you losing out. This is where proper and informed referencing is done when finding a tenant!
Damages and missing items are deductibles too, if the property or any of the items you provided in the property become damaged or are missing you can claim for the cost too. Be aware of the importance of a check-in inventory when your tenant moves in, without a comprehensive document
A property will ideally come cleaned to a decent standard at the start of a tenancy, and that’s exactly how it should be returned, as documented on the check-in inventory. Come to the end of tenancy, if it isn’t returned to the same condition, you can deduct the cost of having it cleaned.
And finally, a tenants deposit can be tapped into if there are unpaid bills. At the start of any tenancy, the utility suppliers and council should be informed of the tenants move-in. This will move responsibility for bills to be paid to them, and if there is anything outstanding after they’ve vacated, you’ll be able to claim for this.
4. What Happens To A Tenants Deposit At The End Of A Tenancy?
You’ll conduct a check-out inventory and record the latest condition of the property.
You can have this side-by-side with the check-in inventory for a clear view and indicate whether there are any negative changes.
If the tenants aren’t forthcoming with rectifying your concerns, you can lodge a claim with the tenancy deposit scheme you used, and provide further information on what you’re claiming for, and how much.
Your tenant will have the opportunity to accept or decline these claims. If they declined, they could provide evidence to suggest otherwise. And it will be left to an adjudicator to oversee the ruling and make a final decision.
In the case that the tenant doesn’t respond within the specified timeframe, you can fill out a statutory declaration form, submit it to the deposit scheme and have them make a final decision based on their findings.
I Need More Help To Do With My Tenants Deposits!
It can be a bit of a minefield when it comes to deposits, handling them correctly, and dealing with conflicts that stem from tenants deposits.
Abbey Property can offer 15 minutes of impartial advice, and based on your needs and requirements, we’ll show you options to which we can take over overseeing the tenancy and other related items to managing a tenanted property.
Book a free 15-minute consultation with me!