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01748 897 630

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01748 829210

The Importance of Residential Deposits for Landlords

Since 6th April 2007 there has been a requirement for Landlords that collect deposits for Assured Shorthold Tenancies (ASTs) to hold tenant’s deposits in an authorised tenancy deposit scheme, of which there are a variety available.  The purpose of this was to improve the protection of the tenant by ensuring that if there was a dispute at the end of the tenancy, an independent third party can assess how much of the deposit should be returned to the tenant and how much is retained by the Landlord.

There are two types of deposit protection:

  1. Custodial – The scheme itself holds the deposit during the tenancy.
  2. Insurance Backed – The Landlord or Agent hold the deposit during the tenancy but still register the deposit with a scheme.  If there is a dispute at the end of the tenancy the disputed funds will be passed to the scheme for assessment.

In summary deposit protection means:

  1. The tenants deposit is protected in a government authorised scheme.
  2. The tenant must be provided with the chosen schemes prescribed information and the deposit must be detailed with the tenancy agreement.

It is also important that an inventory of contents and a photographic schedule of condition is prepared and agreed between the Landlord and Tenant at the commencement of the tenancy in order to avoid any misunderstandings at the end of the tenancy in respect of the condition of the property.  The authorised tenancy deposit schemes have made it clear that without a detailed photographic inventory and schedule of condition that it will be very hard for a Landlord to make a successful claim against the Tenants deposits should any issues arise at the end of the tenancy.

For further information on how GSC Grays can assist Landlords please follow the link below or contact Lucinda Riddell at GSC Grays Richmond office on 01748 829210.

For more information on becoming a landlord please click here.


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