Renter's Rights - Tenancy Deposits I

Tenancy Deposits – Part I

Most private landlords or estate agents managing properties on behalf of landlords, usually ask for a deposit to be paid before you move into a property.

What is a tenancy deposit?

Tenancy deposits, also known as rent deposits and security deposits, act like a security to cover the landlord in the event that you cause the landlord any financial loss whilst living in the property.

Financial loss can occur through rent arrears, unpaid bills or damage to the property.

How much can you be asked to pay?

Until recently, most rent deposits were usually equivalent to one or two months' rent and in some cases more, as there was no limit on what landlords could charge. This has now changed in England and under the new Tenant Fees Act 2019, as of 1 June 2019, the maximum rent deposit payable by a tenant for new and renewed tenancies is the amount equal to 5 weeks' rent. This limit applies to assured shorthold tenants, lodgers and students in halls of residence whose annual rent is less than £50,000.

If your annual rent is £50,000 or more, then the maximum deposit payable is the amount equivalent to six weeks' rent.

How to calculate your maximum tenancy deposit:

Your monthly rent x 12 ÷ 52 x 5 = maximum tenancy deposit

What if you are overcharged?

If you are overcharged for your rent deposit, i.e., you are asked to pay more than the equivalent of five or six weeks' rent, you can complain to: 

•  The Trading Standards team at your local council. 
• A letting agent redress scheme that your estate agent is a member of

Getting your deposit back at the end of your tenancy

Your deposit should be returned to you in full at the end of the tenancy, unless your landlord has a reason to make deductions. Acceptable reasons for withholding all or part of your deposit are:

• Damage to the property caused by you, which can include wear and tear caused by day to day usage, but not for faded or worn out items that normally fade within time.

• Unpaid rent, to cover rent arrears.

• Cleaning costs, if you left the property (including the garden) in an unsuitable condition that required the landlord to hire professional cleaners to clean the property. The property only needs to be left in the same standard that it was when you moved in.

• Missing items, such as furniture or equipment that the landlord supplied but has been removed from the property. This includes broken items which you threw away.

• Utility bills, that are in your name and that have not been paid. It only applies if the landlord has to cover the outstanding amount before the property can be re-let.

How much can your landlord deduct?

Your landlord can only deduct reasonable amounts to cover the cost of any damage to the property. This is the actual amount that it costs to replace or fix the damage but costs cannot be excessive, i.e. the landlord cannot choose to buy the most expensive items as a replacement or the highest priced company to fix the damage, when in fact it could have been done for cheaper to match the item replaced or for the service to be carried out.

If for example, you damage a bed and the landlord replaces it with a new bed, the cost of the new bed must be the same or similar price to the bed that was damaged. Also taking into account how old the item was, before it was damaged.