This section covers how to register the tenant's deposit at the start of the tenancy.
Most landlords ask for a deposit before the tenant moves into the property. The deposit is security against the tenant leaving the property owing rent or unpaid household bills, or against any damage you think is the tenant's responsibility. The terms of the tenancy agreement should set out clearly the circumstances in which you can keep some or all of the deposit at the end of the tenancy.
Be aware that in Scotland the maximum deposit is 2 months' rent. In England, from 1 June 2019, the maximum is either 5 weeks' rent (if the annual rent is below £50,000) or 6 weeks' rent (if the annual rent is more than £50,000). Until then, and at any time in Wales, note that a deposit of more than 2 months' rent could be regarded as a premium. If a premium is charged for an AST and the tenancy agreement does not state that the tenant must get the landlord's consent to assign or sublet, the tenant can do so without consent. Most tenancy agreements will state that the tenant can't assign or sublet without consent, and the tenant will then be required to get consent whether the deposit is a premium or not. A tenant assigns the tenancy when he charges someone to take it over as the tenant. The tenant sublets if he remains the tenant and then lets the property out to a sub-tenant.
If you don't register the deposit or give the tenant the prescribed information
In England, Wales and Scotland, if you don't register the tenant's deposit in an authorised scheme or give the tenant the prescribed information within the required time, the court could require you to pay an amount of up to 3 times the deposit to the tenant in addition to repaying the deposit to the tenant or paying it into an authorised scheme.
In Northern Ireland, the local council could require you to pay up to 3 times the amount of the deposit or might start a court action for this, which could result in a fine of up to £20,000.
Tenancy deposit schemes are in place across the UK. The schemes you can use will depend on where the property is located.
There are 2 types of tenancy deposit scheme:
The main difference between them is who holds the deposit throughout the tenancy.
Custodial schemes are free of charge; they're funded from the interest earned on deposits held. With a custodial scheme:
Insurance-based schemes charge a fee; they provide cover against the landlord failing to return the amount owed to the tenant at the end of the tenancy. With an insurance-based scheme:
Scheme providers, and when you must register the deposit after receiving it, depend on where the property is located.
You (or your agent) must register the deposit and give the tenant the required information within 30 calendar days.
In England and Wales, there are 3 custodial schemes:, the and the .
You (or your agent) must register the deposit and give the tenant the required information within 30 working days.
In Scotland there are only custodial schemes. The approved scheme providers are:
You (or your agent) must register the deposit within 14 calendar days, and give the tenant the required information within 28 calendar days.