Before you move into private accommodation you are going to have a lot of questions about deposits. A deposit is a sum of money (usually the equivalent of 1 months’ rent) you will be asked to pay before the start of your tenancy. This amount is used to cover costs you may force a lessor to incur; for example, cleaning or maintenance costs. Essentially, it is a safety net for the lessor, so that costs incurred by a tenant can be covered. Watch the video below from Shelter about deposits.
In the event you have a property with a group of people, you might have a joint tenancy agreement and therefore you may pay one deposit as a whole instead of each person paying separately. Try to find out if you need to pay separately or as a whole as it might lead to complications later on should you decide to leave the property early as it may be difficult to get your portion of the deposit out.
A tenancy deposit or security deposit is not a holding deposit! A holding deposit is up to 1 week's rent and is used to reserve a property and is not withheld until the end of a tenancy. If a Holding Fee is charged, then it needs to be returned at the start of the lease, used as part of the initial payment or returned if you fail to take up the property. This is classed as an ‘illegal fee’ if any of the former conditions are not met.
How Much is a Tenancy Deposit?
From June 2019, the maximum amount a tenancy deposit can be is up to the equivalent of 5 week’s rent. If you are being asked to pay more, then refuse and visit Shelter or speak to your council for more information. If you need to calculate if your quoted deposit is acceptable, then take your Monthly Rent and multiply by 12 to find your yearly rent. Then divide this by 52 to get the weekly rent. Lastly multiply this by 5 for the maximum deposit amount. If the lessor is asking for equal to or less than the number you have calculated, then you are being asked to pay more than legally required which is unacceptable.
Is your Deposit Protected?
If you have a private residential tenancy, then upon receiving a tenant's deposit, the lessor must put it into a secure deposit scheme within 30 days. They should provide the tenant with written confirmation about what scheme they have used. This is done to ensure the tenant's deposit is protected throughout a tenancy. Deposit schemes are independent third parties which hold the deposit and mediate in any disputes over the deposits. There are currently three deposit schemes approved by the Scottish Government, which are: my|deposits Scotland, Safe Deposits Scotland and Letting Protection Service Scotland. For further information, visit Shelter.
Getting your Deposit Back
Close to the end of your tenancy, ensure everything in the property is cleaned, maintained and in good working order. Inform your service providers of when your tenancy ends, take meter readings to evidence your energy usage and ensure your bills are paid. Clean the property (check your tenancy agreement to see any specific criteria) and make a note of any breaks, tears and rips that have occurred beyond fair wear and tear (these may be deducted from the deposit). A full deposit is likely to be returned if everything is paid for and cleaned and nothing is broken or missing. Upon the ending of a tenancy, the lessor shall contact the deposit scheme provider and request the deposit be returned, stating how much should be returned to the tenant and how much should cover costs (maintenance, cleaning, unpaid bills etc). The provider asks the tenant if they agree with the amount and they have 30 working days to reply.
If you have come to the end of your tenancy and are informed you will not receive your deposit back in full, ensure you know the resons why. If a £50 deduction to cover a £50 bill you had not paid is proposed, then this is a reasonable deduction. However, if a £50 deduction to cover a £50 bill from before/after your tenancy is proposed, then you may wish to dispute the deduction. In the instance you dispute a deduction, first negotiate with your lessor and provide evidence to you claim. In the event no agreeable outcome is reached, contact your deposit scheme and enter a dispute process which will provide you the opportunity to submit evidence to be reviewed by an independent adjudicator.
Deposit may be used to cover unpaid bills and rent, cleaning costs and maintenance costs. Usually, this happens in the event a property is not returned in the same state in which it was provided the tenant on the date on which their tenancy began. Most tenancy agreements include a clause relating to ‘Fair Wear & Tear’ - this is in reference to slight and small damage, which is caused by everyday use of an item, and that should not be paid for out of a tenancy deposit.
It's sometimes difficult to gauge 'Fair Wear & Tear', but remember that if you have damaged something (that does not normally wear out) OR you have considerably shortened the use-life of something (that does wear out), then you may be charged for replacing or repairing the item. A good example is discoloration to carpets. If this is due to a stain caused by wine, then you would probably be charged for the cleaning cost of the carpet. However, if this was due to daily use of the carpet, then you should not be charged for it.
For further information, visit Shelter and the guidance from the Scottish Government.
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