The National Residential Landlords Association is warning of three avoidable tenancy deposit errors, and how they can be avoided.
It warns that even small errors can result in fines, disputes, or issues regaining possession.
1. Failing to correctly protect the deposit
The association reminds landlords that if they take a tenant’s deposit but fail to protect it and serve the correct paperwork within 30 calendar days, they could be fined up to three times the deposit amount, and prevent the legal serving of a Section 21 notice.
It says to comply with the law, landlords must: “Protect the tenant’s deposit in a government-approved tenancy deposit protection scheme within 30 days of receiving it. Serve the prescribed information to the tenant – also within the same 30-day timeframe. This includes the scheme’s prescribed information template, the scheme rules documentation and the deposit protection certificate.”
2. Failing to return the deposit within the right timeframe
The NRLA adds that it’s key that at the end of a tenancy, the slow return of a deposit, or inaccuracies in deductions, can trigger disputes.
It says you should follow this process: “At the end of a tenancy, you should perform a detailed check-out inspection and compare this with your original inventory. Following the check-out, if there are issues identified with the property then propose a deduction from the deposit. Any money not disputed by either party should be returned as soon as possible, ideally within 10 days although this is not a legally binding timeframe.”
3. Returning Excess Deposit Amount (Pre-2019 Tenancies)
It’s now six years since the Tenant Fees Actintroduced new rules around the maximum amount that landlords in England can charge when taking a security deposit. These rules make it clear that deposits are capped at the equivalent of five weeks’ rent for properties with an annual rent under £50,000.
The cap increases to six weeks’ rent for properties with an annual rent of £50,000 or more. In England, ASTs, student accommodation, and licences are caught by this.
The association reminds landlords: “If the tenancy started pre-2019, so you took the deposit before the Tenant Fees Act existed, and a part of it was in excess of the cap, then you can simply refund the deposit at the end of the tenancy in the usual way, and don’t have to return the excess provided the tenants remain on the same tenancy.”
This article is taken from Landlord Today