As a landlord in the UK, there are two deposits that you will need top be aware of. These are a holding deposit and a tenancy deposit. While both payments are made by the tenant to the landlord, as part of the tenancy agreement, there are differences between the types of deposits. In this blog post we look at the legal requirements for a holding deposit and a tenancy deposit.
The UK laws surrounding the holding deposits and the tenancy deposits are very strict. In fact, one of the common causes of landlord stress is the understanding of legal responsibilities they have. This is why many landlords in Peterborough and surrounding areas use our property management services. This way they know that their property is protected, and they don’t have to deal with the stress of renting out their own property. We manage all that for them.
So, let’s look at the two different deposit types, the holding deposit and the tenancy deposit.
- Holding Deposit
A holding deposit is governed by the Tenant Fees Act 2019. This states that landlords cannot charge more than one week rent for this type of deposit. In addition, the landlord must return this holding deposit within 15 days if the tenant decides not to comply with the tenancy agreement.
- Tenancy Deposit
The tenancy deposits are covered by Section 213 of the Housing Act 2004. This states that landlords must protect all tenancy deposits from tenants. These must be placed in an approved scheme. In addition to this, the landlord must provide written evidence of this within 30 days.
There is a limit to a tenancy deposit requested by a landlord. This is capped at 5 weeks’ rent if the annual rent if below £50,000. However, if the annual rent is between £50,000 and £100,000 then six weeks of the rent can be requested as the tenancy deposit.
Again, this is a service that many local landlords in Cambridgeshire use our team for. We can request the correct amount for the tenancy deposit and ensure that it is protected in an approved scheme.
Ensuring that you comply to the legal requirements for holding and tenancy deposits is vital. If you do not comply you could be liable for significant fines. There are also penalties that could be imposed on you by the authorities. If you need help managing your rented properties in Peterborough, call our team now. We will ensure that all your legal obligations are met and your properties are cared for.
