Landlord tenancy deposit protection checklist

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Landlord tenancy deposit protection checklist

Checklist provided by 

www.tenancydepositscheme.com

Why we work with the TDS

 

It is a legal requirement that, as a landlord, you protect your tenants deposit in a Government-approved tenancy deposit protection (TDP) scheme, like Tenancy Deposit Scheme (TDS), if your property is rented out on an assured shorthold tenancy (AST) agreement.

The checklist below is designed to direct you to follow best-practice processes to help you and your tenants avoid tenancy deposit disputes. Should a dispute arise at the end of tenancy, this checklist will also help you to present the relevant evidence to support your case.

Important Note: From 1st June 2019, for any new AST tenancies signed and entered into after this date, landlords in England are not permitted to ask for a deposit that exceeds the equivalent of 5 weeks' rent (or 6 weeks if your annual rent is £50,000 or more). It is called the Deposit Cap. If you are unsure if the deposit you have requested is correct, you can check instantly with this online Deposit Cap Calculator from TDS.

  Start of the tenancy

If the tenancy is in England, make sure you have calculated the tenancy deposit in accordance with the latest deposit cap legislation, which came into force on 1st June 2019. Use the online deposit cap calculator to check legal compliance.

Register and protect the tenancy deposit within 30 days of receipt, with a Government-approved tenancy deposit protection (TDP) scheme like that offered by TDS. The deposit can be held in either an Insurance-backed scheme (where you hold the deposit) or a free Custodial scheme (where the scheme holds the deposit).

If you are relying on a letting agent to manage your tenancy deposit protection for you, the same 30-day deadline applies. You will be liable if they get it wrong so check that your agent has protected the deposit within the 30-day deadline.

If the letting agent collects the deposit for you, you must register and protect the deposit before the agent releases the deposit to you.  The deposit will need to be registered within 30 days from when your agent received the deposit from the tenant - not from when you receive it.

   

If you use TDS Custodial to protect your tenants deposit, the letting agent can do a member to member transfer of the deposit from their TDS Custodial account to yours. 

 

Irrespective of who is protecting the deposit, the landlord is also responsible for telling the tenant and anyone who paid the deposits on behalf of the tenant (classed as ‘relevant persons’) where the deposit is protected. This is called the “Prescribed Information” and must be issued within 30 days of receiving the deposit along with specific details of the tenancy deposit protection scheme and a leaflet explaining how the tenancy deposit protection scheme works; Download templates and scheme leaflets here.

If you use TDS Insured, you can use TDS's editable template for the Prescribed Information.

If you use TDS Custodial, you can save time by using the pre-populated Prescribed Information document once your deposit registration is complete.

 

Draw up a robust tenancy agreement that details all tenant responsibilities explicitly to avoid any misunderstanding. Make sure that your agreement specifies what the deposit can be used for – this is known as a ‘deposit use clause’.

 

Conduct a comprehensive inventory/check-in report, and allow the tenants to check and sign the inventory to confirm their agreement. Make sure the condition and cleanliness of the property and its contents are noted. Read the TDS Guide to Inventories, Check-ins and Check-outs for more information.

Take photos and date them to show the condition of the property’s interior and exterior at the start of tenancy.

Keep all your documentation and invoices safe as you may need them later for evidence should a deposit dispute arise.

  During the tenancy

Keep a written record of all communications you have with your tenant in one place, as these may be useful in supporting a deposit deduction claim later.

If you give permission for something to be changed in the property, such as decorating, make sure you specify how you expect it returned at the end of tenancy. Don’t assume it will be repainted in the same colour you had it at start of tenancy if you haven’t agreed this in writing.

Ensure you maintain the most up-to-date contact details for your tenant (and all sharers).

If your tenant gives notice, try and do a pre check-out inspection before the tenancy ends, to give the tenant pointers on what needs to be rectified before they move out of the property.

Confirm in writing the check-out arrangements and remind the tenant of any special conditions in the tenancy agreement that they might have overlooked.

If you experience mid-tenancy changes, in a joint tenancy, such as an existing tenant moving out and a new tenant replacing them, it is best practice to bring the existing tenancy to an end, check out the named tenants, distribute the deposit correctly and re-serve updated documentation. This is not always practical so for more information on this read the TDS Guidance document on a change of sharers mid-tenancy.

End of the tenancy

Arrange a check-out inspection on the last day of the tenancy, or as soon as possible after the tenant has left. Ideally, the tenant should be present during the check-out inspection. If this is not possible, ensure the tenant checks and signs the check-out report in agreement. Consider taking dated photos to compare to those taken at start of tenancy.

Quantify any deduction you intend to make from the deposit and inform the tenant as soon as the tenancy has ended. TDS has a useful Deductions Template to help lay out any proposed deductions.

Make sure you only make charges permitted and detailed in your tenancy agreement and that you factor in fair wear and tear and betterment. You cannot expect the tenant to reinstate any damage to a better standard than it was at the start of the tenancy. TDS produce some helpful case studies that are worth looking at.

Justify your charges to the tenant if necessary. It is not unreasonable to be asked for evidence of the cost you are proposing. TDS has created a ‘Deductions Template’ to help landlords clearly set out proposed deductions you wish to make from the tenancy deposit. Download this free guide here.

If the tenant disagrees with your proposals, do try to negotiate first. Most tenancy disputes are resolved by agreement, which can save time, money and avoid court. TDS can assist in these negotiations if you use their TDP scheme.

  Disputes

If you hold the deposits, the tenant must be told of any potential deductions and you should return any undisputed sums to the tenant within 10 days of the tenant asking for their deposit to be returned

You should try to reach an agreement, over the return of the deposit, with your tenant before raising a dispute with the TDP scheme

Ensure any dispute is logged with your TDP scheme as soon as possible and for Insured schemes, no later than three months after the end of the tenancy.

Time Savings

Much of the processes above can be quickly and easily actioned with free templates, pre-populated forms, calculators and tools in the TDS Custodial and Insured schemes. For non-customers, there is also a wealth of downloadable guides, real-life landlord case studies and videos to help you here.

If you are not a customer of Tenancy Deposit Scheme (TDS) yet, you can join today in minutes. Find out more about switching tenancy deposit schemes: Why Switch?


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