Security deposits and the law

 

What are security deposits?

Security deposits – or tenancy deposits – are required by law to be paid by tenants to their landlord as security against damage or rent arrears whilst in tenancy.

Security deposit law – prior to the changes

The law regarding security deposits changed in 2007 in an attempt to put tenants and landlords on a more level playing field in the event of a dispute. Before the change in security deposit law, landlords held the deposit and if a dispute arose then the tenant would have had to sue the landlord in an attempt to retrieve some or all of the deposit.

Security deposit law – now

The change in security deposit law has made it compulsory for a landlord to use the tenancy deposit scheme.

What is the tenancy deposit scheme?

There are two main types of scheme available to landlords:

  • The custodial scheme
  • The insurance scheme

What is the custodial scheme?

In the custodial scheme the tenant pays the deposit to the landlord, who must then pay the deposit into the chosen custodial scheme within fourteen days of receiving the money. The landlord must also give the tenant details of the scheme that has been selected, the landlord or agent’s contact details, how to apply for release of the deposit, information explaining the purpose of the deposit and what to do if there is a dispute about the deposit.

At the end of the tenancy, if the parties agree how the deposit should be divided, the scheme will return the deposit as agreed. If there is a dispute, the scheme will hold the deposit until the dispute resolution services or the courts decide what is fair.

What is the insurance scheme?

The insurance-based scheme differs from the custodial scheme in that the landlord continues to hold the deposit, but pays a premium to the insurer. If there is agreement at the end of the tenancy as to how the deposit should be distributed, then the landlord should return the agreed amount to the tenant. If there is a disagreement, then the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.

What if you have a dispute?

If you have a dispute over your tenancy deposit, you should contact a landlord and tenancy solicitor. They may be able to get your whole deposit back.

If your landlord or agent has not protected your deposit, they can be ordered to repay three times the amount of the deposit back to you.

If you would like to obtain legal advice on security deposit law, Caven can put you in touch with a local specialist landlord and tenancy solicitor free of charge. Please call us on 08001 221 2299 or complete the web-form above.

Call
08001 221 2299
or fill in the form
Our trained advisor contacts you
Your chosen specialist solicitor calls you
Quick enquiry form
What our clients say about us
"The firm you recommended was extremely helpful. Your service has been very useful indeed and I won't hesitate to contact you again or recommend your service to friends and family." Liz, Family law, South Wales, Aug 13
"Thank you so much for your recommendation. The solicitor suggested really interesting alternatives, and gave me moral support. I'm so glad I came across your website."
LR, Kingston, Nov 10
"We engaged the solicitor's services and everything has been fantastic. It was such a relief...I wish I had called you earlier and saved myself hours of calls!"
Jaye, Civil litigation, N. Yorks, Feb 13
"Having accepted referrals for several years through Caven, I have been most impressed by the quality of their leads and their professional approach."
AE, Manchester Solicitors, July 09
"I was offered unbiased and honest opinions from the firm you put me in touch with. I felt unpressured and this took a weight off my mind." KS, Employment law, Oxford, July 12
"Caven's solicitors were fantastic and won me the compensation I was hoping for following my accident."

Tom F, PI, Edinburgh, March 09
"Sincere thanks for making things a lot easier for me and my family. When I contacted you initially I really didn't know where to start and was terrified by what costs might be involved."TC, London, March 11
"Your service was very quick, easy to use and I got legal advice in a language I could understand. Superb service!"

RC, Bristol, July 11
"Initially I was sceptical about asking a question online (never having done that before) but would do it again and would recommend others do the same." Pete Chambers, Feb 12
"Thanks for following up. We are going with and I'm very please with the way you have helped us. I will certainly recommend you to our clients." John, Commercial property law, The City, May 13

Most Viewed Related Pages: