Can a Landlord Keep a Deposit – and If So, When?

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Can a Landlord Keep a Deposit – and If So, When?
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A tenancy deposit is not uncommon in the United Kingdom. Landlords can often ask for this to be completed when a tenancy first begins, to give themselves protection against damage caused to the property. While the deposit required is agreed with the tenant before their tenancy begins, there have been anecdotes of landlords withholding the deposit in exceptional circumstances. So, is this legal – and if so, when is a landlord allowed to do it?

Whether you are a landlord or a tenant, it is important that you are well-educated on this subject, so you understand the different options available to you. Read our blog below to find out when a landlord is able to keep a deposit from a tenant.

How much is a tenancy deposit?

The tenancy deposit required by a landlord may vary according to the cost of the rent, and the landlord themselves. However, a tenancy deposit is not allowed to be more than 5 weeks rent in the UK, if the annual rental amount is less than £50,000. The deposit is 6 weeks rent if the annual amount is more than £50,000.

The landlord themselves is allowed to decide how much the deposit will be (they can make it less than 5 weeks if they want to) and the tenant then has a choice whether to agree to it or not. Once the tenancy ends, the tenant will then be refunded their deposit, if the landlord does not attempt to withhold for reasons we have explained in this blog further below.

Your landlord must return your deposit within 10 days of you both agreeing how much you’ll get back.

When can a landlord keep a deposit?

A landlord is allowed to keep a deposit if they can prove that they have lost out financially because of your actions. The most common example of this is when the tenant has caused damage to the property. In this instance, if the landlord can prove that the damage was caused by the tenant, they may use the initial deposit to cover some of the repair costs.

Another reason a landlord can keep your deposit is if you owe them rent payment. In this instance, your initial deposit will be used to cover this unreceived payment – but once again, the landlord will need to prove that your rent payment has not been made.

Thirdly, a landlord can keep a deposit if the tenant has lost or broken some items from the inventory. Common examples might be cutlery or mugs.

Keep in mind that a landlord can only withhold your deposit if they can prove that the damage or missing item was caused by you. For example, some items experience ‘wear and tear’ naturally over time, such as carpet, rugs or mattresses. Therefore, a slight deterioration is going to be difficult for them to prove you are at fault for, and your deposit should therefore be rightfully yours.

It is important that you know all your rights as a tenant, to ensure your landlord doesn’t take advantage of you. Understanding your rights when your landlord decides to sell a tenanted property is another important part of this subject.

What can I do if my landlord has wrongly kept my deposit?

If your landlord has kept your deposit, but you feel that it is unfair, then there are steps you can take to rectify this.

If your deposit is protected in a Tenant Deposit Scheme, you can use the scheme’s ‘alternative dispute resolution’ service to get your deposit back. If your landlord refuses to go along with this, then you can take them to court.

If your initial deposit is not covered by a Tenant Deposit Scheme then you will need to take your landlord to small claims court to get your money back.

Can I prove that damage was not caused by me?

It is widely recommended that you take photographic evidence of the property’s condition before you move out for the final time. These photos should be in high quality and in-detail. By doing this, it will give you some protection if your landlord claims that damages have been made, which is simply not true. You will be able to use this evidence in court, if it gets that far. You may also wish to consider getting a check-out inventory and asking your landlord to sign it.

What is a Holding Deposit?

A holding deposit is a payment made to a landlord by someone who wants to reserve a property. This deposit is made before any tenancy agreement is made. In some instances, a landlord will ask for a holding deposit while they carry out pre-tenancy checks, such as credit checks or referencing.

Your landlord does not have to protect your holding deposit. Once you become a tenant, the holding deposit becomes a deposit, which they then must protect. This is one of the many different landlord responsibilities when renting out a property.

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