The Importance of Putting your Tenant’s Deposit into a Protected Deposit Scheme
We are often instructed by Landlords who seek possession of their property. As a first step, we will ask you to provide us with key documents such as:-
- Assured Shorthold Tenancy Agreement.
- Copies of Notices served on the tenant (if any).
- Tenancy Deposit Certificate.
A Tenancy Deposit Certificate will evidence that you have placed your tenant’s deposit in a protected scheme. There is an additional requirement that the Landlord must provide a copy of the Certificate and the prescribed information to the tenant, or person who paid the deposit on their behalf, within 30 days of receiving the deposit.
If you have failed to protect your tenant’s deposit, this can result in a fine of up to three times the amount of the deposit which is payable to the tenant as compensation. The amount of the fine is dependant on the seriousness of the breach. For instance, a landlord may be required to pay the highest fine where they have denied ever receiving a deposit, but the Court has found that they did indeed take a deposit from the tenant.
It is vital that your tenant’s deposit is protected to avoid having to pay a fine and holding up the procedure for possession of your property.
In addition, a Deposit scheme may be useful where a dispute has arisen as to who the deposit should be returned to at the end of the tenancy as some schemes offer a resolution service. For example, you may find that the tenant has damaged the property and you therefore require the deposit to pay for remedial works. The general rule is that the deposit is the tenant’s money until the landlord can justify their claim for it with evidence. You will need to provide the Deposit scheme with a witness statement and invoices for works carried out in order to support your claim
If you would like to discuss this further, please contact Lynn Gooch on 01992 578642 for more information.