Housing - Deposits (and other housing payments)

Before you move into a new house or flat you may be required by the landlord to pay various sums of money.  There are a number of different payments in addition to rent which you may be required to pay at the start of a tenancy, or as a condition of being granted a tenancy. 

This information is intended to give information about these payments e.g. what they are for, whether they are returnable and, if so, how to ensure that you get them back.  If you need further information or have any problems with these payments, please contact the Student Advice & Representation Centre.

Premiums

A premium (also called “key money”) is a non-returnable lump sum paid to a landlord to secure a property.  Not very many landlords ask for a premium, but it is not illegal to do so and there are no restrictions on the amount a landlord can request.  If your landlord requires a premium think very carefully whether you should pay it given that they are not often required.

Agency Fees

If you find accommodation through an estate agent or accommodation agency, it is likely that you will be charged for this service.  You may also be required to pay other charges e.g. for drawing up a tenancy agreement or inventory.  Fees vary between agents.  The important point is that you can only be charged if and when an agent is successful in finding you somewhere to live.  It is a criminal offence for an agent to ask for or accept money simply to    register your name and/or requirements.  It is also a criminal offence for an agent to ask for or accept money for supplying addresses or other details of houses to let.  If an agent asks for money prior to finding accommodation you should consider carefully whether or not to pay as it may be difficult to get back e.g. what would happen if you failed a reference check?

Retainers

A retainer is a payment made to a landlord by a prospective tenant who wishes to move into the accommodation at a later date.  There are no restrictions on the amount the landlord can ask from the prospective tenant, but students commonly pay half-rent for July and August.  In the period covered by the retainer leading up to the start date of your tenancy the landlord has complete access to the property, including the right to rent it out (at full rent) to others.

Rent In Advance

Some private landlords ask for rent to be paid in advance before the tenant can move in. How much rent in advance (if any) they ask a prospective occupier to pay will vary, and landlords are free to ask for any amount although we would recommend that you did not pay more than one rental period (e.g. one month).

Deposits

A deposit is a sum of money which you may be required to pay to a landlord (or their agent) as security in case you damage the landlord’s property or   furnishings.  The contract may specify that it can also be used to cover, for example, unpaid bills, unpaid rent and missing items.  The deposit paid when you sign an agreement is usually paid as a holding deposit (which turns into a damage deposit when you move in).  If you decide not to move in, you need to check with the landlord/agent to see if you would lose the deposit.

The amount of deposit that tenants are required to pay varies.  Commonly, landlords ask for a sum equivalent to a month’s rent, but they can legally ask for up to one-sixth of the annual rent (usually 2 month’s rent).

From 6th April 2007, if you pay a deposit your landlord must protect it using one of three Tenancy Deposit Schemes.  The aim of the schemes is to protect private tenants' deposits from being wrongfully withheld by landlords or agents, and help resolve disputes about the return of deposits where they arise. Landlords will be able to choose between two types of scheme:

  • One custodial scheme where the deposit is held by the scheme during the tenancy and during any legal dispute. The Deposit Protection Service is running the only custodial scheme.
  • Two insurance-based schemes where the landlord or agent keeps the deposit, but the deposit is insured in case of any dispute.  The two companies running these schemes are Tenancy Deposit Solutions Ltd and The Tenancy Deposit Scheme.

Landlords or agents will only be able to take a deposit from a tenant if that deposit is protected by one of these schemes. If your landlord hasn’t protected your deposit, you can apply to your local county court.  They can order the landlord or agent to either repay the deposit to you or protect it.  If they don’t protect your deposit, they can be ordered to repay three times the amount of deposit to you.

If you are asked to pay a deposit you should make sure you have something in writing specifying how much the deposit is, what it is meant to cover, that it is refundable (subject to certain deductions the landlord may legitimately claim for) and which scheme is protecting your deposit. 

Within 14 days of receipt of the deposit, your landlord or agent must give you the following details:

  • The contact details of the Tenancy Deposit Scheme they are using.
  • The landlord/agent’s contact details
  • How to apply for the release of the deposit
  • Information explaining the purpose of the deposit
  • What to do if there is a dispute about the deposit

Safeguarding your Deposit

When you move into a property, you should draw up an inventory, or check the existing inventory if there is one. You should make a detailed list of the furniture and fittings in the property.  Also, you should record the condition of the items in the inventory and the general condition of the property.  It would also be helpful to take photographs and make a note of any problems on the inventory.  See the Student Advice & Representation Centre “Housing Inventories” leaflet for more detailed information on inventories. Take care of the house and furnishings during the tenancy. Ask the landlord to remove any furniture you do not need.  Make sure you observe your obligations under the agreement. Towards the end of your tenancy write to the landlord inviting him/her to inspect the property. Ensure the property is clean for the inspection.  Use the inventory. Make sure you settle all bills keeping confirmation of payment. When you leave, return all keys to the landlord and make a written request for the return of your deposit.  Keep a copy of the letter.

Getting your deposit back

If you paid your deposit before 6th April 2007 and are trying to get it back, please contact the Student Advice and Representation Centre, or visit the National Union of Students website for information on getting your deposit back, as the information below relates to deposits paid after 6th April 2007.

When your tenancy comes to an end the landlord should return your deposit to you if you have kept the property in good condition.  The deposit must be returned within 10 days of the landlord and tenant agreeing how much of the deposit should be returned, or within 10 days following notification of an ADR/court decision (see later).

If you have caused damage to the landlord’s property or furnishings, it is reasonable for a landlord to make a deduction from the deposit to cover his/her losses.  It is not reasonable for a landlord to make deductions for fair wear and tear.

For international students returning home when their tenancy ends, tenancy deposit schemes will be able to return deposits into foreign bank accounts (although there will probably be a charge of this that the tenant will need to pay).

What if the landlord withholds all or part of your deposit?

If there is a dispute over the return of the deposit, each of the three schemes contains a free service to help you resolve your dispute – these are commonly known as Alternative Dispute Resolution (ADR) services.

For more advice and information about deposits and other housing payments, please contact the Student Advice & Representation Centre.

 

Last updated: 29th May 2007

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