Friday, August 12, 2022
UncategorizedTenancy Deposits - What Landlords should Know

Tenancy Deposits – What Landlords should Know

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With a forecasted buy-to-let boom as the private rental market expands, new landlords and business entrepreneurs are emerging to capitalise on the rising demand. Landlords can use a free property valuation to determine the accurate value of their property. This can aid in quick letting and ensures that you receive the highest rent possible. The legal obligation of tenancy deposit protection is one aspect of private property management that new landlords may not completely comprehend. There’s a lot more to it than picking an insured where you hold the deposit and the scheme protects it for a little fee or custodial scheme, where the scheme holds the deposit for free.

Photo by Taryn Elliott from Pexels
Photo by Taryn Elliott from Pexels

Every landlords’ primary query is “how much is my property worth?”. For maintaining the buy-to-let property there are several key timeframes, paperwork, and processes you’ll need to be aware of to avoid breaking the law. Not only will knowing the basics help you avoid financial penalties, but it will also help you avoid avoidable deposit disputes at the conclusion of your rental. The government-approved Tenancy Deposit Scheme (TDS), whose adjudicators have a reputation for resolving disputes quickly and equitably, has put together a fast reference to tenancy deposit protection.

TDS is also recognised for offering landlords, brokers, and tenants with a multitude of free and valuable information, guides, workshops, and unbiased content. 

Ensure that your deposit is protected within the specified duration.

A government-approved system, such as the Tenancy Deposit Scheme (TDS), must be used to protect deposits on assured shorthold tenancies (ASTs) within 30 days of receiving the deposit. It’s vital to remember that a holding deposit is not a tenancy deposit and does not need to be protected under section 212 of the Housing Act 2004.

Deal with the deposit properly if it was paid on the tenant’s behalf by someone else.

A “relevant person” is the person who pays the deposit on behalf of the tenant. This is a person, company, or organisation that paid the deposit on behalf of the renter pursuant to an agreement with the tenant, such as a local authority, employer, parent, or guarantor. This relationship is not required to be put into the TDS tenancy database in TDS Insured. This relationship must be entered against the deposit protection in TDS Custodial.

On time delivery of your Prescribed Information

Within 30 days of receiving the deposit, the landlord (or their agent) must provide prescribed information to the renter (or the relevant person) together with the scheme brochure. Because the time limit begins when a portion or all of the deposit is judged to have been received, serving Prescribed Information before this time is not recommended even if you are attempting to be expedient, as it will be in violation of the law. The best practice is to keep track of when the documents were served so that you can prove they were delivered on time.

Adhere the Tenant Fees Act.

Landlords are prohibited from demanding certain fees and exorbitant deposits under the Tenant Fees Act. As a result, it’s critical that you compare your deposit amount to the Deposit Cap rule and consult the newest TDS Tenant Costs Matrix for allowed tenant fees. Fees are regulated differently across the UK, so don’t assume the same rules apply in England and Wales, for example, or you’ll be caught off guard. 

Follow the scheme’s proper end-of-tenancy procedure.

When your fixed-term tenancy ends, we will send you an email reminder through the TDS Insured scheme. If the tenancy ends without a disagreement, you must log into your TDS account and disable the deposit protection. In TDS Custodial, you should first speak with the renter about any deposit deductions you want to make, and then submit a reimbursement request using your online account. The Depositary programme can aid in the automation of much of the end-of-tenancy process, making life easier for both landlords and tenants.

Know the deposit dispute process.

An adjudicator can only make a decision based on the facts supplied to them. They will not contact the parties for more information or evidence, and they can only resolve a disagreement if both the renter and the landlord agree. When an adjudicator looks at a case, they need to know what the claim is about and how much it’s worth. They get this information from the landlord and tenant’s Dispute Application and Dispute Response, which they transmit to TDS. It is worthwhile to take the time to correctly complete these so that the adjudicator is clear on the claim’s intent.

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