It is quite commonplace for a landlord to routinely ask a new tenant to put down a damage deposit or security deposit when they begin a new tenancy agreement in a rented property. The purpose of the deposit is to provide the landlord with a sum of money from which deductions can be taken if any part of the property or fixtures and fittings are damaged when the tenant leaves.
The value of a damage deposit may vary, but is typically set at one or one-and-a-half months’ rent. The deposit is usually paid before moving in, and is accompanied by an inspection when the tenant and the landlord, or their agent, go around the property together inspecting the condition of the property, the fittings and any furniture provided as part of the tenancy.
In general damage deposits cannot be retained and should be returned at the end of a tenancy agreement, unless the landlord can demonstrate damage beyond reasonable ‘wear and tear’, or unless a condition of the tenancy agreement has been unfulfilled, for example if the property is dirty when the agreement stipulated that it should be left clean.
Failure to return a deposit
Disputes between landlords and tenants over the return of the damage deposit are commonplace and, as a result, in April 2007 the Government introduced new laws obliging landlords to place deposits collected into an independent third-party deposit protection scheme.
The purpose of deposit protection schemes is to avoid situations where landlords spend the deposit given to them, and then are unable or unwilling to return the deposit to the tenant at the end of the tenancy agreement.
What are my rights in relation to my damage deposit?
The government deposit protection schemes ensure that tenants are entitled to receive their deposits back providing they have met the terms of their tenancy agreements, have not damaged the property and have paid and settled rent and bills.
Generally, if you and your landlord agree on the amount of deposit you should receive back there should be no issue. In such circumstances your landlord is obliged to return your deposit within ten days of the end of your tenancy agreement.
What can I do if my landlord refuses to return my damage deposit?
If there is a dispute then the tenancy deposit scheme will offer a free dispute resolution service if you wish to use it. This can be used even if you cannot contact your landlord. If you believe your landlord did not place your deposit within a scheme, then you should seek legal advice. It is likely a county court could find against your landlord in such circumstances, and can order them to pay back three times the deposit within 14 days of judgment.