12 Tips of Christmas

Deposit Protection

Here at TDS we understand that being a landlord is a big responsibility and we’re here to help you understand your legal obligations and help make the process of being a landlord as easy as possible.

So in the spirit of Christmas, here are our 12 tips for landlords in the style of the 12 days of Christmas.

Calendar icon1. Remember, you must protect your tenant’s deposit within 30 days of receiving it

Protecting a tenant’s deposit is a mandatory part of being a landlord. This is to protect both you and your tenant, and there are two different methods of protection available. You can only protect a deposit with a government-approved provider, such as TDS.

£ icon2. Deposit protection is mandatory, but it doesn’t need to be expensive

The Tenancy Deposit Scheme is committed to maintaining our high standards of customer service while keeping the cost to landlords affordable. In fact, 74% of landlords surveyed believed that TDs offered excellent value for money.

split icon3. There are two types of deposit protection – Insured and Custodial. What is your preference?

Insured schemes allow landlords to hold the deposit in their own account. and gives the landlord more control over the deposit return at the end of the tenancy. Instead landlords pay a small fee per tenancy to guarantee the deposit. This fee varies dependant on a number of factors such as deposit value, or if you are eligible for a discount due to professional memberships.

Custodial protection is a free service which offers peace of mind for landlords by holding the deposit on their behalf, meaning that for the duration of the tenancy, both the landlord and the tenant can rest easy knowing the deposit is secured. At the end of the tenancy, both parties contact the scheme to release the funds.

Whichever method you choose you can only protect a deposit with a government-approved provider, such as TDS.

group icon4. Renting to joint tenants? Find out how if the deposit is affected.

A deposit is protected for a tenancy as a whole and joint tenants will be joint and severally liable. This means that if one tenant damages something or doesn’t pay their rent, all tenants are equally responsible for putting it right.

If you are letting a property on a room-by-room basis with common facilities, the deposit should be protected separately for each tenant and you will not be able to use other tenants’ deposits when against another tenant’s liability.

mail icon5. Communication is key – make sure you give us a tenant’s email address when you register the deposit

Communication can often be the difference between a successful tenancy and a disputed deposit return. By providing the tenant’s email address to us at the time of deposit registration you will be opening up the doors for communication.

In our custodial scheme we will send the tenants log in details so that there are no delays in them participating in the deposit repayment process at the end of the tenancy.

Similarly, in our insured scheme, having an email address will mean that we can gather evidence and communicate with all parties throughout any adjudication.

document icon6. Make sure you’re providing the correct documents at the start of every tenancy

A landlord is legally obliged to provide a selection of documents at the beginning of every tenancy. We find it easiest to compile a little folder which can be given to each tenant. In addition to including mandatory documents such as the energy performance certificate (EPC) and gas safety certificate, many landlords find it useful to include photocopied manuals for any appliances supplied to the tenants (e.g. microwaves).

A selection of mandatory documents:

  • Prescribed information relating to the tenancy deposit
  • Energy performance certificate (EPC)
  • Gas safety certificate
  • Right to rent guide

spray icon7. Cleaning is not subject to fair wear and tear, but make sure you include cleanliness on the inventory

When evaluating the property at the end of a tenancy, it is reasonable to expect the tenants to have cleaned to the same standard as it was at the start of the tenancy. It is important to list cleanliness as a separate requirement in its own right to ensure that appropriate consideration is given to the general cleanliness of your property.  If you have had the property professionally cleaned and the carpets shampooed, include this on the inventory; similarly ‘cleaned to a domestic standard’ is much more descriptive and less subjective that just ‘clean and tidy’.

flower icon8. Don’t leave out the garden when doing an inventory – gardening can be expensive!

The condition of a garden can be an easy one to forget, but a costly mistake to make. Professional gardening services are relatively expensive, and doing it yourself can take an age. Ensure you have provided clear guidelines on what you would like tenants to do for upkeep – including what they may not do. It’s easy to cut the grass if the tenant forgets, but you will find it much harder to put branches back on trees in the case of over-zealous tenants.

time icon9. To avoid a dispute with tenants send a friendly reminder about cleaning before their check-out

Disputes can often be avoided if both parties communicate openly from the beginning about their expectations. Letting the tenants know in a friendly reminder is a good way to prompt them into action, without provoking a defensive response.

calculator icon10. Has the tenant moved out mid-way through the month? Find out how to calculate pro-rata rent.

Calculating rent when a tenant moves out can be a difficult task, but it is important to get it right. There is a simple formula to use, to calculate pro-rata rent.

( (Months Rent * 12) / Days in the Year) * The number of days the tenant needs to pay

Let’s assume that it’s a leap year, so there are 366 days this year. Your monthly rental fee is £750 and the number of days that the tenant needs to pay is 10.

Therefore: ( (£750*12)/366)*10 = (£9000/366)*10 = £24.59*10 = £245.90

scale icon11. When is wear and tear not fair? Find out what our adjudicators think.

An important legal concept is that a landlord should not be put in a better position at the end of the tenancy then they would have been if the tenant had not broken the terms of the tenancy agreement. For example, if the carpet was 2 years old when the tenant moved in and stained at the end of the tenancy, the landlord can seek compensation accordingly, but not for a brand new carpet. The amount of wear that is fair will depend on a number of factors including the length of the tenancy, number of occupants, location of damage, etc., but does not extend to cleanliness. A worktop can be 5 years old and scratched, but still able to be cleaned.

chat icon12. Prevent disputes by communicating with your tenants before issues have the chance to escalate

Forget location, location, location it’s all about communication! Disputes can be an awful process for everyone involved. The best way to deal with a dispute is to prevent there from being any issues in the first place.

Open communication is the key to a happy tenancy, both for you and your tenants. Be very clear about your expectations and their responsibilities. Provide a check-in and a check-out check report, and stay in touch with the tenant throughout the tenancy. By having these in place, it may also help you if anything does go to an adjudicator as you will be able to show evidence that you have been trying to communicate with the tenant from the start.

We hope these 12 tips have been useful for you. Have any tips of your own? Send them to us on Twitter (@TenancyDeposits)!

For more information on deposit protection, please see our page on the options available to landlords.