What do I need to do when I protect my tenant/s deposit?
If you take a deposit from your tenant/s you MUST protect the deposit and serve your tenants with the correct documentation within 30 days or face having to pay a fine and the prospect that you cannot use the s21 eviction process should the need arise.
It is also important to be able to prove that you serviced the documents on your tenant/s by obtaining a signed receipt, post office proof of postage or a witness statement.
Each deposit scheme has its own documentation (available to download from their websites) and requires you to give your tenant/s, and anyone who has contributed to the deposit, the following documents:
- A copy of the deposit protection certificate/receipt – this is issued by your deposit protection scheme provider when you protect a deposit.
- The “Prescribed Information”, a set of information set-out in law which you must provide to your tenant/s. You can obtain a template for this from your scheme provider’s website.
- The deposit protection scheme leaflet for your tenant/s. Some scheme providers send this to your tenant/s but to be sure you comply, you should send a copy with the prescribed information.
Don’t forget to serve within 30 days and get proof of service.
Double check with your deposit scheme provider’s guidance as they may require you to give your tenant further information to the standard requirements listed above.
Your tenancy deposit scheme will provide you with your tenancy deposit certificate/receipt once you have protected.
Under the legal requirements, you must give a copy of the deposit protection certificate to the tenant/s and any third parties that have contributed to the deposit, within 30 days.
The tenancy deposit protection legislation requires the landlord not only protects the deposit under either a custodial scheme or one of the insurance-backed schemes, but in addition, provides the prescribed information to the tenant explaining how the deposit has been protected and giving some specific legally required information.
Landlords and agents must also give this prescribed information to any third party / interested party (i.e. someone who has paid the deposit on behalf of the tenant whether in whole or part). Examples of this may be a parent or guarantor paying a deposit on behalf of a student tenant, or when some local authorities pay deposits on behalf tenant/s under a deposit bond scheme which they operate.
When you have protected the deposit and you have given your tenant a copy of the deposit protection certificate/receipt, if you fail to serve the prescribed information then the deposit protection is not compliant with the law – you are potentially liable to a penalty of one to three times the amount of the deposit and will be prevented from serving a valid Section 21 notice.
Completing the Prescribed Information:
- The prescribed information can be signed by the landlord or the agent.
- In the case of joint tenants, the landlord need only complete one form but this must be addressed to all of the tenants. You must include details of all the tenants in the prescribe information; not just the lead tenant.
- Where a third party pays towards the deposit, the prescribed information must also be sent to that third party separately.
- It’s a good idea to make sure your tenancy agreement is an up-to-date one that takes into account and refers to the tenancy deposit scheme, giving details of the scheme used and the circumstances in which the deposit can be reclaimed.
- You must also provide your tenant/s and any third party/interested party who has paid/contributed towards the deposit, a copy of the relevant scheme leaflet.
- Recent changes in the legislation mean that when a tenancy becomes statutory periodic (this will be automatic when the fixed term ends unless another agreement is signed), and provided no other tenancy details have changed, then there should be no need to serve any further prescribed information, though you should inform your deposit scheme.
Here is the prescribed information template provided by the DPS scheme.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums