How to protect a tenant deposit

0
1289
Image of landlord
Canstock image

How to protect a tenant deposit

When you rent your property to a tenant, you need to protect the deposit on an assured shorthold tenancy that started after 6 April 2007.  Currently, you must do this within 14 days of taking the deposit.

You can protect the deposit by way of a custodial scheme or an insurance-based scheme.

The custodial scheme holds the funds for you, the insurance-based scheme allows you to hold onto the deposit but register it for a fee with a company.

The schemes in England and Wales are

There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

If you receive a valuable item as a deposit instead of money (e.g. a car or watch), you don’t have to put it in a TDP Scheme.

For in-depth guidance here is the Government website that gives you all the information you need to do this.

What happens if a tenants deposit is not protected

The landlord will face penalties if he/she does not protect a tenancy deposit.  A court can order the landlord to pay the tenant between 1 and 3 times the amount of the deposit if it has not been secured.  For further Gov.UK guidance, if you are a Tenant click here if you are a Landlord click here.

Find further how-to guides

Improve your chances of securing a Mortgage
Improve Your Credit Score
Buy a Property for the First Time
Buy and Sell a Property at the same time
Buy a Council Property
Re-Mortgage a Property
Reduce your Mortgage Payments
How to Extend a Lease Agreement
Insurance you need for a Property
Become a Landlord
Improve your Property to Sell
Insurance
Surveyors
Conveyancing Solicitor
Mortgage Finder