What can happen if you don’t protect the deposit properly
Our case study illustrates what can go wrong if you fail to protect the deposit properly
How to protect the deposit properly
If you take a deposit, you must:
protect it within 30 days of receiving it (not from the tenancy start date)
provide your tenant with the prescribed information about where and how it’s protected, in the same 30 days
keep the deposit protected for the duration of the tenancy
return the deposit (less any agreed deductions) at the end of the tenancy
The tenant should also be given:
details of how to claim back the deposit at the end of the tenancy
the most common reasons for proposing costs when the tenancy ends
their options on what to do if they disagree with the landlord’s proposed deposit refund and proposed settlement, following unsuccessful negotiation
Non protection is serious and can result in:
a ban on serving a Section 21 notice
a court order to repay up to three times the deposit amount in compensation plus the deposit
Yes but there were no legal consequences
Yes and there were legal consequences
No, I have always protected deposits correctly
Case study: The cost of poor agent compliance
A landlord employed a letting agent to manage their property. When the tenant stopped paying rent, the landlord asked the agent for the deposit protection certificate and referencing documents - only to find they didn’t exist.
What went wrong:
The agent had not protected the deposit
No referencing was carried out
The landlord was unable to make a rent guarantee claim because both points above were required to make a claim on the policy
The outcome:
The agent provided no response, so this case was a default decision based on the evidence and statements from the complainant landlord. It was decided that the agent had provided very poor service, and had not carried out their due diligence with the skill and care required, and the following awards were made:
The agent was to compensate the landlord £1,442 equivalent to the amount of rent outstanding by the tenant, as the agent did not do what was required for the insurer to cover the claim
The landlord was also awarded £500 for poor service and communication issues
Key takeaways:Even if you use a letting agent, you as the landlord are ultimately responsible for making sure the deposit is protected. Landlords should make sure any letting agent they choose to manage their property:
is accredited
carries out proper referencing and provides a copy of the report to the landlord
provides proof that the tenancy deposit has been properly protected
In addition, if you take out a rent guarantee policy, such as Total Landlord’s legal expenses and rent protection insurance, make sure that it provides the required cover and be aware of any restrictions.
