How to protect your tenant deposit

Tenancy Deposit
So first things first….what exactly is a tenant deposit?

It's not a silly thing to ask, as they are really two kinds of deposit - one is an initial lump sum payment that gets knocked off the overall cost at the end, say like a down payment on a car.

The other is really an amount you pay that's held over to cover costs that might, or might not, occur. This type of deposit can eventually be paid back to you, and that's the kind you pay at the start of a tenancy.

When you find a home you’d like to rent there this is one of the two main expenses that you’ll need to factor into your budget, the other, quite separate one being a month’s rent in advance.

Just to complicate things, there are usually two deposits to pay! One will be to secure the property. This is often a week's rent and will be refundable. The other is called a security deposit.

So what does a security deposit cover and how do you get it back? Read on...

Damage and costs

A security deposit is the way landlords cover themselves against any damages and associated costs that come about during your time as their tenant. Of course, this doesn't cover normal day to day wear and tear things like a carpet wearing out or a washing machine breaking down.

If you look after your rented home and don't cause any wilful damage there's no reason you shouldn't get your security deposit back in full when you leave.

A security deposit in the UK can legally be no more than the equivalent of five weeks rent per tenancy for properties under £50,000 per year. It's six weeks rent above that level.

The money must be held in a government approved deposit protection scheme for the duration of your tenancy. It’s worth remembering that the deposit also covers rent arrears, unpaid utility bills or items missing from the contents itinerary.

Checking in

Before you move in the landlord or lettings agent will do a detailed check-in inventory. As well as noting the condition of the property this will also list everything that is covered by the security deposit

This document is really as important as the tenancy agreement itself so it’s important that you take the time to read it.

Everything from the paint and plasterwork of walls and ceilings, flooring and carpets, fixtures such as bathroom basins and kitchen cabinets, freestanding furniture (if the property is part or fully furnished), and of course all the appliances like a cooker, fridge and washing machine will be checked.

If you’ve ever hired a car and then had a problem when you return it, you'll know how important it is to make sure any scratches or dents are noted before you drive away right at the start - it's the same with a rented property!

So the biggest way to protect your tenancy deposit is to make sure the inventory is correct and accurate before you sign it.

Checking Out

When you move out a similar check-out inventory will be done on the last date of your tenancy - you should make sure you're there while it’s carried out, because obviously it's the discrepancies between the original one and this one that would be the reason for you not getting any or all of your deposit back.

Inventories are a legal requirement so if your lettings agent or landlord doesn’t offer one you should think twice about the whole thing - at the very least maybe about arranging an independent one for your own use.

One other top tip to take utility meter readings when you move in (and out) to make sure you only pay for the energy you have used and not the previous tenant or next tenants!

Deposit Schemes

Two of the main deposit schemes are the Tenancy Deposit Scheme (TDS) and the Deposit Protection Service (DPS). Both are designed to ensure that your deposit is protected and that you’re treated fairly.

Introduced in England and Wales by the Government in 2007 they apply to anyone who has paid a deposit on an assured shorthold tenancy. Landlords can choose between a Custodial scheme where the full amount of your deposit is held by either TDS or DPS for the full term of your tenancy or an Insured scheme. Neither should affect your rights when it comes to getting your deposit back.

Looking After Your Home

The best way to protect your deposit is to look after your rental home as if you owned it.

This might sound obvious, but many landlords will have found to their cost this isn't the case - it’s why they want a security deposit from you.

So making sure you look after things, especially if it's a fully furnished let, is really a no-brainer. However, there's more to it than that and it's one area where renting has distinct advantages over owning a home!

Property Management

These days’ landlords are likely to use the services of a property manager.

This will usually be the lettings agent you have already dealt with to secure your rental and it's well worth realising that they are there to help you as much as they are to help the property owner.

Lost your keys? Let your property manager know straight away. Notice some cracked plaster? Give them a call. Washing machine making a funny noise? It's not your job to fix it - get the property manager on the case!

Apart from making your life easier and hassle-free there's also a legal requirement for landlords to fix most things, so don't be shy.

Most importantly though, if you leave a leaky tap or a damp patch it could turn into something much worse and even cause you problems when it comes time to getting your deposit back.

Register with us and find out how we work for our tenants and landlords to make sure everyone gets the best out of their rental - let us be your property partner for life