Find out about paying a deposit before you move into your property and how to get your money back when you move out.

What is a deposit

A deposit is a sum of money that you pay at the beginning of your tenancy to the landlord or letting agent.

Holding deposit

A holding deposit is a deposit taken by the landlord or letting agent, usually to hold a property while paperwork is drawn up and credit checks are completed before the tenancy agreement is signed. Legally, a holding deposit cannot be more than one week of the rent for the property. To return it to you, the balance of the holding deposit is usually used to form part of the five weeks’ security deposit once the tenancy agreement is signed. If you change your mind before signing the tenancy agreement you may not get your holding deposit back.

Security deposit

A security deposit acts as a protection against any financial loss the landlord might face if you or anyone else living in the property does not pay rent or leaves the property damaged.

The deposit you pay should be no more than the equivalent of five weeks’ rent.

Money can sometimes be taken from the deposit if there is:

  • damage to the property or the fittings
  • unpaid or outstanding rent
  • redecoration costs due to tenant damages
  • costs to remove rubbish or possessions from the property
  • cleaning costs to return the property to the condition it was given to you in
  • costs to replace locks or keys if keys are not returned.

Landlords have to take into account fair wear and tear. This means they can’t take money for changes to the property that have occurred as a result of day-to-day living in the property.

Fee-based deposit alternatives

Increasingly, agents and landlords are offering fee-based alternatives to deposits through services such as Reposit and Zero Deposit. These are not deposit schemes and do not fall under the government’s approved list of schemes (MyDeposits, TDS and DPS).

Instead of paying the agent or landlord a refundable security deposit equivalent to five weeks’ rent, you will be asked to pay a non-refundable fee (usually around one week’s rent) to use the service. If there are any damages or unpaid costs at the end of the tenancy, the service will recover the costs from you directly instead of being deducted through a security deposit. If you wish to dispute any charges at the end of the tenancy, some services will charge a fee to do so.

If you can afford to pay a refundable security deposit through a government-approved scheme, there is little benefit to using a fee-based service. There are no additional costs to use a government-approved scheme, and the whole deposit is refundable if there are no deductions to be made at the end of the tenancy.

If you do wish to use a fee-based service, ensure that you read through the terms and conditions in full before agreeing to anything.

Protecting your security deposit 

If you have an assured shorthold tenancy, your landlord or letting agent must put your deposit in a Government-approved tenancy deposit scheme to protect your money.

Landlords and letting agents have 30 days from the payment of your deposit to register it with one of the following schemes:

Once your landlord or letting agent registers the deposit, they should provide you with the details of the scheme.

If you share a property with others, you may all contribute to one single deposit. In this case, some of the schemes prefer there to be a ‘lead tenant’. This means:

  • the deposit will be registered in the lead tenant’s name
  • any communication about the deposit will be with the lead tenant
  • the deposit will go back to the lead tenant at the end of the tenancy.

Your deposit does not legally have to be protected if you do not have an assured shorthold tenancy, for example, your landlord lives with you in the same house. In this case, you should ask for written receipt of payment, and the terms under which the landlord or letting agent may deduct from the deposit.

If you think your landlord or letting agent should have protected your deposit but are unsure if they have, you can contact Housing Services for advice.

Getting your security deposit back

There are several things you can do during, and at the end of your tenancy, to ensure you get as much as your deposit back as possible when you move out.

When you move in 

You should be given an inventory, which outlines the condition of the property on the day your tenancy begins.

On your first day in the property, go around and check the items listed on the inventory are correct and that no existing damage is missing from it.

If you disagree with anything recorded on the inventory, or if anything is missing, let your landlord or letting agent know in writing as soon as possible. You should also take photographs of the property to keep a record of the condition you found the property in.

During your tenancy

You can also minimise the risk of deductions from your deposit while you are living in the property by:

  • making a cleaning rota with your housemates. This will help to keep your property clean and tidy throughout the tenancy
  • keeping on top of the garden. Don’t leave it until you move out if the landlord has to arrange for an overgrown garden to be tidied up, they can remove the cost of this from your deposit
  • reporting any repairs during your time in the property as quickly as possible to your landlord. You should also keep a record of your report in writing in case you need evidence of it at the end of the tenancy.

When you move out

A check out inventory will be arranged by your landlord or letting agent. It will be compared to the inventory made when you moved in to check for any differences, such as damage.

If your landlord or letting agent wants to make any deductions from your deposit, they should inform you in writing once the check out inventory has been completed.

If you agree that the deductions your landlord or letting agent wants to make are fair, you should receive your deposit (minus the agreed deductions) back within 10 days.

If you feel that the deductions your landlord or letting agent is suggesting are unfair, you should let them know why in writing as soon as possible, explaining why you disagree.

If you and your landlord or letting agent cannot reach an agreement, you can contact the deposit scheme under which your deposit is protected to begin a dispute resolution process. In this process the deposit protection agency will collect evidence from both you and your landlord or letting agent and make a final decision about how much of your deposit should be returned.

Any decisions made by a deposit protection agency are final.

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