Deposit information
A returnable deposit may be held against damages or unpaid rent and should be refunded within 4 weeks of the tenancy ending. It is usual to ask for the equivalent of one months rent (the legal maximum is two months) and landlords should always provide a receipt.
An inventory should be completed when each tenant moves into your property confirming the condition of the property and its contents when the tenancy starts. Both you and the tenant(s) should keep a copy of the signed inventory. Photographs taken at beginning and end of tenancy are useful as proof of damage.
If you need to retain all or part of a deposit, a written list will need to be provided detailing damages and costs, you should be able to provide receipts for work done.
It is recommended that you meet the tenant(s) on the day they move out to agree deductions. You cannot make deductions from a deposit for fair wear and tear.
Landlords issuing an Assured Shorthold tenancy are required by Law under the Housing Act 2004 to join one of the three Tenancy Deposit Protection Schemes.
The Landlord can choose the type of scheme, either:
• Custodial – Scheme administrators hold the deposit and the scheme is free of charge
• Insurance – The Landlord holds the deposit but has to pay an insurance premium.
All schemes will be supported by an Alternate Dispute Resolution service to avoid disputes going to court. If deposits are taken but not protected by one of the three schemes, the tenant can go to court and request that you provide the information regarding the scheme you are using to hold the deposit or, return it to them. Meanwhile you will have to pay the tenant a fine of 3 times the amount of the deposit.
Further information
The Association of Residential Landlords has a useful factsheet for landlords dealing with deposits, disputes and damages