Accommodation deposits explained
We’re at that time of the year where you’re possibly starting to think about next year’s living plans.
If you’re in Halls it’s pretty likely that you’ll be moving out, hopefully with a group of students you’ve gelled with, to a private tenancy.
If you’re already in a private tenancy you may feel its time to start a new contract somewhere matched to your changing needs or maybe your landlord is looking for new tenants.
Either way one thing you’ll need to plan for if you’re moving to another rental, is your deposit.
There are two types of deposit you may come across:
A Holding Deposit, sometimes called a ‘Holding Fee’ is a refundable payment made to the landlord or letting agent to reserve or ‘hold’ a property of interest to you whilst you are sorting out the tenancy admin.
The amount you can be charged is limited to a maximum of one weeks rent and it essentially takes the property off the market for 15 days.
If you utilise this make sure to get the details of your holding deposit in writing. This should include how much you paid and what will happen to the money if you don’t move in.
The landlord or letting agent must give you your holding deposit back if they decide not to rent to you or you:
- decide not to move in.
- don’t give them important information within 15 days – for example a reference, if requested.
- give them false or misleading information.
- fail a ‘right to rent’ immigration check.
If you do end up signing a tenancy agreement for the property you can get the holding deposit paid back to you within 7 days of you signing the agreement or you can request for it to be paid towards your tenancy deposit or first rent payment.
Of course, be mindful about paying a holding deposit. If you simply change your mind about signing on the property, the landlord or letting agent will keep it, so do make sure that you and your housemates really want the property before you hand over any money.
A Tenancy Deposit, sometimes known as a Security Deposit, is an amount of money that you pay to your landlord or letting agent as a protection to cover any unpaid rent or damage to the property.
The amount is agreed in advance and is usually the value of 4 weeks rent.
Your landlord should confirm in writing what the deposit covers as well as your responsibilities as a tenant, in your tenancy agreement and be signed by both you and the landlord.
If these responsibilities are not followed, the landlord may be able to keep part or all of your tenancy deposit.
Money can be deducted from deposits for breakages or damage caused by misuse of the property or its fixtures or fittings.
Landlords cannot deduct money for general ‘wear and tear’ of the property.
We advise that you make your own inventory of the property when you move in and take your own photos and notes of any damage or dilapidation that you see to keep both send to your landlord and keep for your own record.
If you are a group looking for somewhere together, you could be asked for a combined sum of the deposit. Be sure to just pay your share and insist on your own itemised receipt that you can keep for when you leave.
Some letting agents like all the money for the deposit or the rent to come from one tenant, the ‘lead tenant’. If you are that person and another house mate doesn’t pay you, you will get lumbered with the bank charges if you exceed your overdraft limit, so make sure you fully understand the consequences of what you are signing up for.
Will I have to pay if my housemates damage their room or miss their rent payments?
The answer to this question depends on whether you sign a joint assured shorthold tenancy agreement for the property as a whole, or if each of you sign separate assured shorthold tenancy agreements on a room-by-room basis. You should ask your landlord / letting agent or check your contract to be clear about what type of tenancy agreement the property attracts.
If it’s a joint tenancy, all tenants contribute to one, shared tenancy deposit. As this deposit covers the tenancy as a whole, all parties are equally liable for any rental arrears or damage to the property even if the damage has only taken place in one person’s room, or if one person has fallen behind on rent.
If the property is rented on a room-by-room basis and you have signed an individual tenancy for each room, you’ll only be liable for that room and the shared rooms, such as the kitchen or bathroom. This means that you will only be responsible for paying your own rent and maintaining your own personal space
What happens to my deposit?
Your landlord will be responsible for protecting your tenancy deposit with a government-approved Tenancy Deposit Scheme within 30 days of you paying your deposit and you will be notified of where your deposit has been protected.
If you don’t receive this information, you should request it from your landlord or letting agent in the first instance, but you can also check directly with TDS directly to see if your tenancy deposit has been protected.
How do I get my tenancy deposit back?
This is an important question, especially if you are hoping to use your deposit to pay for your next tenancy.
Your landlord or letting agent should return your tenancy deposit to you within 10 days of the tenancy ending if they are satisfied that the property has been returned in a clean, undamaged state as required in the tenancy agreement.
However, if there are damages in the condition of the property, the landlord or letting agent may wish to make deductions from the tenancy deposit.
You can then either accept the deductions or challenge them through TDS’ free, online alternative dispute resolution (ADR) service. In these cases, both the landlord/letting agent and the tenant need to provide evidence to support their claim on the deposit and the ADR service assesses the evidence.
Most other letting fees are now banned. If you are asked to pay anything else, check exactly what it’s for. It is a legal requirement for agents to display exactly what they can charge you before, during and at the end of a tenancy so take your time to read through the small print.
If this seems too overwhelming, ask someone you trust for a second opinion or come and speak with us at Student Advice, we’ll be happy to talk you through the start-up costs for your next accommodation and help you navigate the student housing system or signpost you to colleagues in the Accommodation Service here at UoB.
Student Advice Service