Today, more people are renting houses than actually thinking of buying one. This has created a good market for property owners to make handsome passive income.
According to research data, it is expected that by 2039, tenants will outnumber homeowners.
Despite the fact that the market might seem easygoing, for first-time renters, a tenancy agreement can be a daunting task. There is a lot to consider and be aware of, especially the tenancy deposit.
There have been many cases where the renters have been taken advantage of, and their tenancy deposit was not taken care of how it needed to be.
If you are just moving out of your family house and looking for a place to stay, this article will help you with the tenancy deposit scheme and things you can do when your landlord does not follow the rules.
What is a tenancy deposit protection scheme?
The government launched the Tenancy Deposit Protection Scheme program in 2007 to provide better protection to tenants on their tenancy deposits.
According to this program, the system prevents the landlord from using the tenancy deposit for their own needs or as their own income. The amount is safely deposited in the scheme until the tenancy is over.
In addition to this service, the program also offers an alternative dispute resolution service. Any dispute arising at the end of tenancy over the deposit will be adjudicated independently.
After this scheme, it has been seen that the tenants and landlords can hold a clear conversation over the rent and damages to the property over the course of the tenancy.
Furthermore, this also offers peace of mind to the tenant, as they know that their tenancy deposit is taken care of securely.
Depending on where you live, there are three tenancy protection schemes you can apply for:
Landlord’s tenancy deposit scheme obligations
We all know that a tenancy deposit is paid to ensure tenants can’t take advantage of the property and damage it. However, that doesn’t mean land landlords can use the deposit money as their own.
To ensure the landlord is not taking advantage of the privilege they have been given with the tenancy deposit, the landlord needs to deposit the tenancy money in the bank and safely return it to the tenant once their tenure is over.
After 2007, it became legal for the landlord to deposit the tenancy deposit money in one of the government-backed schemes. Once they have deposited the money, landlords are asked to notify the tenants about the deposit within 10 days of agreeing.
A landlord is responsible for providing you with a copy of the deposit protection certificate to the tenant within 30 days of receiving the deposit. If you do not receive any certificate within 30 days, it is likely that you are eligible for compensation.
When can tenants claim compensation?
You can file for compensation when the landlord is unable to provide you with a tenancy deposit certificate.
However, what if you have been a tenant for more than a year and have no idea where your tenancy deposit money is? In that case, you are eligible for compensation under the following circumstances.
- You are not sure whether or not your tenancy deposit money is secure
- You know your deposit money is not secure
- You didn’t receive any deposit certificate to date
If you think your landlord has mistreated you regarding the tenancy deposit, you can file a case and make a landlord deposit protection claim.
Is there a time limit for making a claim?
There sure is! The standard time limit for a person to make a claim is 6 years from the date when the claim actually arose. That being said, in the case of a tenancy deposit claim, the time will be counted from the date on which the landlord was responsible for returning the deposit.
This is where the time limit becomes a little tricky. The exact date will depend on the terms of the contract and the terms of the deposit scheme.
If you have had issues with your tenancy deposit within the last 6 years, you can file a case and ask for compensation.
How much compensation can you claim?
Now that you know whether you can claim, you might be wondering how much you can claim.
Compensations are likely 1 to 3 times the total tenancy deposit amount. This is the standard compensation. Now, this can increase if there are multiple breaches in the contract.
For example, if the deposit was not secured in the first contract. Then you later renew the contract making these two separate breaches. The law will see them as two different instances, and compensation will be offered accordingly.
When can a landlord make a deduction from the deposit?
The tenancy deposit is like a security deposit that protects the landlord’s property from the tenants. That said, if the tenants fail to meet their obligation under the contract, the landlord is entitled to a reduction from the tenancy deposit.
The obligation might include the following:
- Unpaid rent.
- Unpaid bills.
- Missing item.
- Damage to the property.
- Lack of maintenance.
- Indirect damage to the property because of negligence.
It is a common occurrence for disputes to arise. The tenancy security deposit ensures that these disputes can be handled easily.
Hire a lawyer
Renting a house or a room comes with a series of paperwork. If this is the first time, you are in for a real mess. You might get confused with new terms, privacies, policies, and contracts. Hire a lawyer to ensure that you do not fall into some contract loophole or find yourself a victim of fraud.
A lawyer is well aware of how contracts work. They will be able to warn you about the loopholes in the contract. And if something happens with your tenancy deposit money, the lawyer can take the initiative to represent you in court and help you get your claims.