Tenancy deposits

A tenancy deposit (also referred to as a landlord’s security deposit) is a refundable deposit paid by a tenant to the landlord prior to moving in.

It is used to cover any costs that are incurred as a result of a tenant’s neglect, such as repairing for broken items and cleaning.  The deposit however cannot be used to replace items that have broken or been damaged which is a result of normal wear and tear.

Under government legislation, all tenancy deposits for assured tenancy agreements, with rent under £25,000 per annum, must be paid into a Tenancy Deposit Scheme.  This means is that a landlord must pay all deposits that they receive from their tenants into one of two schemes which are provided by three different companies, which have been selected by the government.  The landlord must tell the tenant which of the schemes / companies they have paid the deposit into.

The schemes are designed to encourage both landlords and tenants to make clear agreements prior to the tenancy beginning as well as making it easier to resolve any disputes at the end of the tenancy.

For more information on the three schemes that are available you can visit the Direct Gov website which explains the scheme in more detail.

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