A tenant’s deposit is required to be protected by law. This burden falls on the landlord. The landlord should place the tenant’s deposit into an approved deposit protection scheme within 30 days of receipt. This is the case even where the deposit is paid for by someone else such as the tenant’s parents. Examples of approved deposit protection schemes include the Deposit Protection Service, the Tenancy Deposit Scheme and MyDeposits.
Deposit protection schemes are designed to protect the tenant from landlords holding onto the deposit unnecessarily at the end of a tenancy. The tenant’s deposit will be returned to the tenant provided they have abided by the terms of the tenancy agreement, left the property in an acceptable condition and paid all their rent and bills.
The tenant’s deposit will be returned within 10 days once the landlord and tenant have agreed on the amount to be returned. If there is a dispute as to the amount, the deposit will be kept safe until the dispute has been resolved.
It should be noted that landlords are not required to protect holding deposits. Holding deposits are money paid by a prospective tenant to hold a property before they actually become a tenant.
Once they become an actual tenant, that holding deposit becomes a deposit and the landlord must then place the deposit into an approved deposit protection scheme.
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