Tenancy deposits are important. They give landlords comfort that they won’t be out of pocket if there is damage to the property at the end of the tenants or if there are arrears. However, tenancy deposits are subject to a lot of regulation to ensure that tenants' interests are protected.
In this episode of Good Landlording, Suzanne Smith and Richard Jackson cover the following:
The difference between custodial and insured deposits.
The rules about tenancy deposits.
What happens if landlords don't comply with the tenancy deposit rules?
How does a tenancy deposit differ from a holding deposit?
What deductions can landlords make?
Can landlords charge for their own time?
Can a landlord replace something with an upgrade?
What happens if the tenants won’t agree to the deductions?
>> Blog post: What deductions can landlords take from tenancy deposits?
>> Blog post: What landlords need to know about Deposit Protection Schemes
Key insights about deposits
Here are the key insights from the podcast episode.
The rules about tenancy deposits are intended to ensure that deposits are properly protected, ad that the landlord makes appropriate deductions.
Custodial deposits are held by third-party schemes, while insured deposits allow landlords to keep the money.
Landlords need to register the deposits and provide the prescribed information about the deposit protection to the tenant within 30 days.
If the deposit is not protected properly, tenants can claim compensation and a landlord won't be able to issue a valid Section 21 notice.
It's essential to document the condition of the property with a detailed inventory, preferably done by an independent third party as that constitutes better evidence.
Landlords can charge for their time spent on cleaning and repairs under certain conditions. (See the MyDeposits article explaining the circumstances where landlords can charge for their time).
Disputes over deposits can be escalated to the deposit schemes.
>> Related episode: How to manage tenants and keep them happy
Credits
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Music: "Paradise Found" by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.
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