Will I get my deposit on a rental property or HMO?
One of the biggest worries for a tenant renting a property is whether they’ll get their deposit back, right?
Often, tenancy deposits are large sums of money and key to a tenant being able to move on to their next rental property or put towards buying their first property.
Since June 2019, deposits taken for tenancies are capped at either five weeks’ rent or six weeks’ rent, depending on the amount of annual rent being paid.
But the capping of deposits doesn’t necessarily ease any fears tenants might have of losing their deposits.
Here, we’ll explain all the rules around tenancy deposits and holding deposits, explain the steps you can take to ensure you get your deposit back and reveal the most common reasons landlords make deductions…
The rules on tenancy deposits and holding deposits explained
Since the introduction of the Tenant Fees Act in 2019, tenancy deposits have been capped.
For properties where the annual rent is £50,000 or less, your tenancy deposit should be capped at five weeks’ rent.
If the annual rent exceeds £50,000, landlords can request six weeks’ rent as a tenancy deposit.
If you pay a holding deposit to reserve a property, meanwhile, this should be no more than one week’s rent.
Do you get a holding deposit back?
If you pay a holding deposit on a property and you do end up renting it, your landlord should either return your holding deposit within seven days or put it towards your tenancy deposit or first month’s rent if you agree.
Once you’ve paid a holding deposit on a property, the landlord should stop advertising it for 15 days.
That timeframe is how long you have to commit to the property and sign a tenancy agreement.
If you pay a holding deposit and decide not to rent the property, or you miss the 15-day deadline, your landlord could keep what you’ve paid.
They are also able to keep your holding deposit if:
- You mislead them, or their letting agent
- You fail a Right to Rent immigration check
Tenancy deposits: What your landlord must do
Your landlord must place your tenancy deposit into one of three government-approved deposit protection schemes when you started your tenancy.
If they failed to do so within 30 days of your tenancy starting, you may be able to take them to court to claim your deposit back in full – as well as up to three times the deposit amount in compensation.
The three tenancy deposit protection schemes also provide a resolution service for landlords and tenants in the event of a dispute.
If you can’t reach an agreement with your landlord over deductions they wish to make, approach the scheme provider with whom your deposit is registered.
The three main deposit protection schemes in England and Wales are: