Tenant Fees Act

The Tenant Fees Act gives guidelines to tenants and landlords about payments that tenants are responsible for. It states that a maximum of 5 weeks' rent can be paid as a deposit.

What can a deposit protection scheme do?

A deposit protection scheme is a government-backed scheme that provides a service of protecting the money paid for a deposit by tenants (or third parties on behalf of tenants) until it is ready to be repaid to tenants (if agreed upon by both parties).

There are two main types of deposit schemes:

• Custodial: The landlord or agent protects the money through a DPS for the duration of the tenancy. Once the tenancy has come to an end, once both parties (landlord and tenants) have agreed, the deposit will be refunded to the tenants (fully or partially) within 10 days after the agreement date.

• Insurance: The landlord pays an insurer a fee for protecting the deposit. Once the tenancy has come to an end, the landlord pays the tenant back. If this does not happen, the insurer is responsible for attempting to retrieve the deposit from the landlord.

If needed, what is deposit money to be used for?

Landlords can use deposit payments to cover unpaid utility bills or rent, to repair damage sustained to the property (natural wear and tear do not apply as it is to be expected), and for cleaning the property if necessary. In the case of a dispute over the deposit payment amount, landlords must be ready to provide evidence of requiring the amount of money being claimed for and what it is going to be used for.

The different kinds of schemes available

There are three main types of schemes available:

• Deposit Protection Service (DPS)

• MyDeposits

• Tenancy Deposit Scheme

All of which are government-backed, therefore have the authority to hold onto deposit monies.

When should the tenant be repaid?

Once an agreement has been between tenant and landlord on the refunded amount, the money should be returned to the tenant within 10 days.

At the beginning of the tenancy, the deposit should be placed into a protection scheme within 30 days.

Kronos Estate Agents are able to supply services of Deposit Protection so landlords have very little to worry about. Call us on 020 8004 4477 to speak to one of our trusted advisors or email us atinfo@kronosestates.co.uk.