Tenancy deposits are sums of money that tenants pay to landlords and letting agents in order to protect them against potential damages, non-payment of rent or breach of the tenancy contract. The landlord is protected by the deposit, as it ensures that the funds are available to cover any unexpected expenses during or following the tenancy.
What is the amount of my tenancy deposit?
The Tenant Fees Act of 2019 has now set a cap on deposits. The maximum amount of deposit that you can be legally asked to pay does not exceed 5 weeks rent. This applies if your annual total rent is below £50,000.
The deposit is always the property of the tenant. The landlord or agent is simply holding it. The landlord or letting agents are legally required to protect your money. For more information from Letting Agents In Bridgwater, visit Sykesmoore
What are the different protection schemes?
Landlords and letting agencies are required by law to register the deposit of a tenant in England and Wales. The deposit is then protected, and the tenant can claim it if they meet the conditions of the rental agreement and leave the property in good shape.
Three Tenancy Deposit Protection Schemes (TDP) have been approved by the government in England and Wales. Scotland and Northern Ireland also have their own schemes.
The following schemes are available:
- Deposit Protection Scheme
- MyDeposits
- Tenancy Deposit Scheme
All TDP schemes provide two options on how to keep the money.
Custodial Deposit money is placed into a scheme that is held for the duration of a tenancy. It is released when the tenant leaves or any other issues are resolved.
Insurance-based The deposit is held by the landlord in a separate account, and the insurance premiums are paid to cover the deposit.