Avoiding fines of three times the security deposit…

Landlords – are you protecting your deposits?Yes, of course you are.   But are you doing it properly?  Many Landlords will protect the deposit but not necessarily within the correct time...

Landlords – are you protecting your deposits?

Yes, of course you are. But are you doing it properly? Many Landlords will protect the deposit but not necessarily within the correct time frame nor will they get the prescribed information quite right….

Follow these quick tips to check that you are operating correctly:-

1. Use a government backed scheme: there are three schemes available with six different options. The Deposit Protection Service , The Tenancy Deposit Service or My Deposits. All of these offer both a custodial (where the scheme holds the deposit) or an insured option (where you or your agent holds the deposit).
2. Protect the deposit within 30 days of the payment of the deposit. The important issue here is that time starts from the moment the money is paid and not from when the tenancy begins. So, where a tenant pays you earlier than the tenancy start date, make sure that you protect the deposit straight away to avoid being out of time.
3. Issue the prescribed information within 30 days of the payment of the deposit. This is as important as protecting the deposit itself and must be done in the same timeframe (ie: 30 days from payment of the deposit monies). The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 sets out what needs to be included in the prescribed information and it’s incredibly important to include it all – including details of where in the tenancy agreement it states that the landlord can make deductions from the deposit. If any of the prescribed information is missing you could find yourself subject to the penalties discussed below.
4. Get positive confirmation from the tenants that they have been given the prescribed information. The easiest way to do this is for the tenants to be given a copy of the prescribed information when they are sent the tenancy agreement (or when they pay the deposit – whichever is sooner) and for them to sign and return it to you.

So, what happens if you get it wrong?

If you haven’t protected the deposit and provided the tenant with the prescribed information within 30 days of the payment of the deposit monies

1. You won’t be able to rely on a section 21 notice to gain possession of your property (unless you have repaid the deposit in full and can prove this)
2. The Tenant can apply to the courts for you to be fined between 1 and 3 times the deposit – this money is paid to the tenant. (and they can do this for up to 6 years after the end of the tenancy)

You may be thinking, it’s OK, my agent will do all of that for me. A word of caution here, even if you have entrusted this to your agent, if they mess up – you are still liable for the penalties (in addition to the agent) so be very careful to choose an agent who knows what they are doing.

If you have any questions about deposits please give me a call on 01489 579009 or email me at emma@robinsonreade.co.uk.

Emma Macgregor MARLA

Lettings Manager

PS: If you are looking for a ‘smart let’ (http://www.robinsonreade.co.uk/quick-let-or-smart-let/) call us today on 01489 579009 or email us at lettings@robinsonreade.co.uk for honest, expert and friendly advice.