Tenant fee ban 2019 – Security Deposits
Since April 2007, all security deposits taken by a Landlord or Agent for a tenancy on an AST has had to be registered within a Government approved scheme. Prescribed Information and Terms and Conditions have to be provided to the Tenant within 30 days of the start of the tenancy. This is not changing, and failure to comply can result in Landlord’s not being able to regain possession of their property through a Section 21 Notice.
Whilst the amount of security deposit held can vary from Agent to Agent, with effect from 1st June 2019, all security deposits taken for new tenancies will be capped to 5 weeks of the rent for tenancies totalling £50,000 or less per annum. (For tenancies of over £50,000 this will be capped to 6 weeks)
Does this only apply for new tenancies starting on or after 1st June 2019? Yes, but if you are in a fixed term now and your contract is renewed before 31st May 2020 then the balance of deposit paid will have to be reimbursed to you (within 10 days) so just the equivalent of 5 weeks (or 6 weeks) deposit is held.
Does this mean that the Landlord can only claim up to the 5 weeks at the end of the tenancy? Most definitely not! As with the end of any tenancy, a check out has to be carried out to establish if any damage or dilapidation can be claimed against the deposit, together with any rent arrears. Tenants are expected to leave the property in the same condition they found it, taking into account fair wear and tear, and Landlords are within their rights to pursue outstanding monies due to them through the Small Claims Court if the deposit does not cover the full amount due.
Will I have to pay more for a “pet deposit”? No, the Tenant Fee Act prohibits any additional payments above the required security deposit. Sadly, this may result in more tenants with pets finding it difficult to secure rental property. In some instances it may be possible to negotiate slightly higher rental payments but if this is a requirement and a consideration, Landlords and Agents must state this whilst advertising the property.
As always, the deposit will still need to be registered with a Government approved scheme. Penalties for not doing so and providing the Prescribed Information within 30 days could result in the Court awarding Tenants up to 3 times the original amount of deposit paid and non-compliance also means the Section 21 cannot be served.
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