Can a Letting Agent Keep My Deposit?

Q: What if There Is a Dispute About Getting My Deposit Back?

If there is a dispute about your deposit, you can use an Alternative Dispute Resolution (ADR) service, which is cheaper, faster, and less stressful than going to court. If your landlord refuses ADR, you may need to take them to small claims court. To protect yourself, take photos of the property before moving out, keep receipts for professional cleaning, get a check-out inventory signed by your landlord, and save any correspondence about unresolved issues.

With different legal processes, requirements and terminology, renting a property can feel daunting, to say the least. One subject often questioned is deposits – why is a deposit taken? How much of a deposit is required? Can my deposit be kept? How can I raise a dispute over my deposit?

At Peninsular Property, we recognise this confusion and are here to break down the rules around tenancy deposits in the UK so that you can make much more informed decisions and be confident of your tenancy rights.

What Is a Deposit?

A “rent deposit” is an amount of money paid by a tenant to a landlord at the start of a tenancy. This deposit serves as a financial security for the landlord against potential damages to the property, unpaid rent, or breaches of the tenancy agreement.

The deposit is typically refundable at the end of the tenancy, provided the property is returned in good condition and all terms of the lease have been met.

In the UK, landlords are legally required to place this deposit in a government-approved tenancy deposit protection scheme and provide the tenant with information about the scheme used.

Why Does a Letting Agent Take a Deposit?

When you choose to rent, you will be required to pay a deposit of a given amount, which can vary. The purpose of this deposit, also known as a ‘holding fee’, is to secure the property. It also acts as a safety net for the landlord/landlady in the unfortunate event that the terms and conditions in the tenancy agreement are not followed.

This could involve the tenant not paying their last month’s rent or damaging the property. A deposit should only be a temporary hold and will be released back to you if you decide to move out, provided you’ve followed the correct procedure.

How Do I Get My Tenancy Deposit Back?

If it’s your first time renting a property, you’re going to need to know what is required of you to receive the full amount of your deposit back. Yes, you read that right – it’s possible to only receive a partial amount, or none at all. Before we get into that, here’s what you’ll need to do to get your tenancy deposit back:

Clear all rent payments and bills due
Give the requested leave notice
Return the property in a familiar state to when you moved in

So, Can a Letting Agent Keep My Deposit?

Yes and no. Regardless of the amount that you pay as a deposit, if you follow the terms and conditions of the contract, you should receive the whole amount when you leave the property. Your landlord can only keep any amount of your deposit if they can prove that your actions during your stay at the property (e.g. damage to the walls) have caused them a financial loss.

Here are some other instances where a letting agent/landlord/landlady can keep your deposit.:

You’ve broken your tenancy agreement or leaving early
You have any unpaid rent and/or bills
There is cleaning, gardening or decorating required to restore the property
There is damaged and/or missing items that will need replacing (e.g. curtains, sofa, bed frame etc)

What Counts as Fair Wear and Tear?

It’s important to note that we are only humans and life happens! Fair wear and tear, such as small marks and scratches on the walls, faded furniture and curtains, frayed carpets and worn flooring, are not reasons for your deposit to be kept.

There can be a lot of unease when it comes to paying deposits, especially if it’s a large sum of money. Because of this, knowing your rights is essential and also allows you to live with more peace of mind.

Tenancy Deposit Protection Explained

To make sure that your tenancy deposit is safe, there are Tenancy Deposit Protection Schemes (TDS) in place. In this section, we’ll explore what these are.

What Is a Tenancy Deposit Scheme (TDS)?

A Tenancy Deposit Scheme (TDS) is a government-approved scheme designed to protect tenants’ deposits. When you rent a property, you usually pay a deposit to cover potential damages, unpaid rent, or breaches of the tenancy agreement.

A TDS ensures that this deposit is kept safe and can be returned to you at the end of your tenancy, provided you meet the terms of your lease. The scheme provides a clear process for resolving any tenancy deposit disputes.

What Tenancy Deposit Protection Schemes Are Available in the UK?

Tenancy Deposit Protection Schemes offer two types of protection, which include (1) the Custodial Scheme holding the deposit for free and (2) the landlord/landlady or agent holding the deposit and paying the Insured Scheme to insure it.

So, “What are the Tenancy Despot Protection Schemes that are available?” you’re probably wondering. In England and Wales, there are three government-approved Tenancy Deposit Protection (TDP) schemes these include:

The Tenancy Deposit Scheme (TDS) offers both custodial and insured options to ensure all deposits are protected and disputes are handled efficiently.
The Deposit Protection Service (DPS) provides a custodial scheme where deposits are held by the DPS for free and an insured scheme where the landlord or agent holds the deposit and pays a fee for insurance.
MyDeposits also provides both custodial and insured options to give landlords and agents flexibility in how they manage tenants’ deposits.

Rent Confidently With Peninsular Property

Here at Peninsular Property, we’ve been making renting simple and hassle-free, for more than 30 years and our team of experts are committed to helping you along every stage of your renting journey.

We find enjoyment in helping you secure your dream home in your ideal location in and around the Wirral, Liverpool. So, if you have any questions or you’re ready to start your property hunt, get in touch today! We’re ready to help you rent or invest in rental property with confidence.

Renting Deposit FAQs

Are All Deposits Protected by the Schemes?

You’ll be protected by the scheme if you’re renting a home from a private landlord or letting agent on or after 6 April 2007. If your tenancy started before 6 April 2007 and you made a deposit, then you will not normally be protected by the scheme.

What if There Is a Dispute About Getting My Deposit Back?

If there is a dispute about your deposit, you can use an Alternative Dispute Resolution (ADR) service, which is cheaper, faster, and less stressful than going to court. If your landlord refuses ADR, you may need to take them to small claims court.

To protect yourself, take photos of the property before moving out, keep receipts for professional cleaning, get a check-out inventory signed by your landlord, and save any correspondence about unresolved issues.

Joe Martin-Bindley

Joe is the founder of Peninsular Property and has worked in the industry since 2005. Joe has negotiated on over 9 million pounds worth of property purchases and managed over 1000 properties for clients all over the world. Joe is a landlord himself with a varied property portfolio so is ideally placed to advise clients on their property purchases and investments.