Deposits
Holding deposits
If you find accommodation that you like but are not ready to move in, the landlord may ask for a holding deposit to keep the property for you.
Unfortunately this does not always provide the legal safeguard you need as your landlord may be able to withdraw the offer as long as he returns the deposit. If you decide you cannot take the property (for any reason) the landlord is entitled to keep the holding deposit. It is therefore best to negotiate to pay as small a deposit as possible and ensure you have written agreement on what it covers and in what circumstances it is returnable (some landlords will convert a holding deposit to a damage deposit when you move in, but a holding deposit should normally be less than a months rent).
Damage deposits
Almost all tenants will have to pay a deposit or bond to your landlord which he will retain until you leave the property. It is illegal for the sum to be greater than one sixth of the annual rent. It is normally equal to one months rent.
When you move out, it should be returned to you in full provided that you have not caused damage to the property or fittings for which the landlord may deduct replacement/repair costs. The deposit may also be retained to cover unpaid rent or bills, or cleaning cost specified in the contract.
Some landlords retain deposits illegally after tenants leave. A dispute may arise about the condition of the property and whether the landlord has a right to retain any or all of the money for repairs.
There are some precautions you can take to avoid losing your deposit, and which will help you if a dispute arises:
- Always get a written receipt for the money paid, and keep it safe (this should also have your landlord's full name and address on it).
- Agree an inventory with your landlord before you move in so that he cannot claim for damage done before you moved in, draw his attention to any outstanding repairs or damage by previous tenants.
- If your landlord will not provide an inventory, make your own list of fixtures and fittings and their condition with a witness when you move in and out (photographs are very also useful in the event of a dispute).
- If you have a difficult landlord and you suspect he may try to keep your deposit illegally, you may choose to withhold your last months rent to cover any potential loss, provided you have not caused any damage to the property (this is not a legal right ,but you may consider it a practical necessity. Do not withhold rent of an amount over the amount paid in deposit.)PLEASE NOTE: If you try to offset your deposit by cancelling a rent cheque once you have already given it to your landlord you can be sued for the amount of the dishonoured cheque without the landlord needing to prove the case for damage or loss to his property etc. You will still be entitled to claim back your deposit but may not be able to use this as a counter claim
- During your tenancy notify your landlord (preferably in writing) of any repairs that are necessary immediately as you may be held responsible for deterioration caused by unreported problems e.g. leaks or damp
Can my landlord take money from the deposit for cleaning or decorating the flat? - Most tenancy agreements have a clause in them which refers to cleaning of the property including curtains, carpets, bedding etc. If so then it is best to find out what this entails, but is an extra cost which you are expected to bear.
- If your landlord expects professional cleaning of the property at the end of the tenancy it may be cheaper for you to arrange this than allow the landlord to pay for it as he can then deduct this sum from your deposit and it can be difficult to dispute this particularly if the landlord has receipts.
- If carpets etc have any marks at the start of the tenancy ensure that this is noted on your inventory. Decorating costs after you move out should not be deducted from your deposit UNLESS you have damaged the property beyond what is considered "normal wear and tear" e.g. if you have put up pictures or shelves which have left holes in the wall your landlord could charge you for redecoration
What if my deposit is not returned after I leave?
If you move out and your landlord does not return your deposit you may need to take legal action in the County Court, usually the "Small Claims" procedure is appropriate.
Small claims in the County Court
This procedure applies to sums up to a maximum of £3000.
To decide whether to start this action, you must be confident that you have a case and that your landlord can afford to pay. Sometimes a letter explaining that you are preparing to take action will be enough to prompt the return of your money.
Write to your landlord formally setting out your claim and giving a deadline of e.g. one week after which you will proceed with court action if the money is not returned.
If you decide to go ahead with County Court action, you will need advice and information, book an appointment to see a Housing Adviser at the [Students' Union Advice and Counselling Centre|/main/support/advicecentre] or seek advice at another Advice Agency e.g.Citizen's Advice Bureau (CAB)
. The claim will be made in the County Court, you will find the addresses of those in London under "Courts" in the telephone directory.
A solicitor is generally not needed and the Court administration costs involved are usually very small. However, if the Court deems the case too complicated for the County Court or you landlord counter-claims a greater sum of money, there is a slight risk that the case could be transferred to open court where costs may be considerable if you lose the case.
