Landlord Guide To Tenant Preparation

When landlords let a property under an Assured Shorthold Tenancy (AST) in England or Wales, it is common practice to collect a tenancy deposit. This money provides security against unpaid rent, damage to the property, or breaches of the tenancy agreement. However, strict legal rules govern how deposits must be handled, and landlords who fail to comply face serious penalties.

Deposit protection schemes
By law, any deposit taken must be placed in one of the three government-approved Tenancy Deposit Protection (TDP) schemes within 30 calendar days of receipt. The three authorised providers are:

• Deposit Protection Service (DPS)
• MyDeposits
• Tenancy Deposit Scheme (TDS)

These schemes ensure that deposits are kept safe and that disputes at the end of the tenancy can be resolved fairly.

Prescribed information
Within the same 30-day period, landlords must also provide tenants with certain prescribed information in writing. This includes:

• The address of the rented property
• The amount of the deposit
• The scheme used to protect it and how it works
• How to apply for the return of the deposit
• What to do in case of a dispute

Failing to provide this information correctly invalidates compliance, even if the deposit is protected.

Deposit limits
Since June 2019, under the Tenant Fees Act, deposits in England are capped at the equivalent of five weeks’ rent where the annual rent is below £50,000, and six weeks’ rent where the annual rent is £50,000 or more. Landlords cannot demand higher amounts.

Returning the deposit
At the end of the tenancy, the deposit must be returned in full unless there are lawful deductions. Deductions may be made for unpaid rent, damage beyond fair wear and tear, or breaches of the tenancy agreement (such as unauthorised alterations). The balance must be returned within 10 days of agreement between landlord and tenant.

Consequences of non-compliance
If a landlord fails to protect the deposit or serve the prescribed information correctly, the tenant can apply to court. The court may order the landlord to pay the tenant up to three times the deposit amount as compensation. In addition, the landlord loses the right to serve a Section 21 notice to regain possession of the property until the matter is rectified.

To Conclude
Proper handling of tenancy deposits is not optional. Using an approved scheme, serving the correct paperwork, and respecting the rules ensures compliance, protects both parties, and prevents costly legal disputes.