Why landlords can't keep your deposit UNFAIRLY

There was a time not so long ago when many landlords would withold tenants' deposits unfairly. So in 2007 the government stepped in to make the system fairer. It became a legal requirement for landlords or their agents to lodge each tenant's cash deposit with one of the three approved schemes within 30 days of the tenancy starting. A system of indpendent arbitration was also introduced to settle disputes when a tenant moves out.

We are talking about large amounts of money, remember. Tenants often pay up to five weeks' rent which for a tenant paying £650 a week means, together with the first month's rent, his can exced a total of £6,000. And the deposit will be a sizeable chunk of that.

What happens to your deposit?

A landlord must protect a tenant's deposit by lodging it with one of the three Tenancy Deposit Protection scheme providers.

These are:

Deposit Protection Service
My Deposits
Tenancy Deposit scheme

Landlords and agents must provide tenants with written details of which scheme they have used, including details of how to get their deposit back at the end of the lease.

Also, all three services now each offer an insurance-based alternative; so instead of lodging money in a bank account, the landlord insures the deposit but keeps the cash in their own bank account.

Does the system have any teeth?

The tenancy deposit protection system was set up to protect tenants in case, for whatever reason, an agent or landlord cannot or will not return the deposit when a tenant moves out. And if a landlord or agent does not follow the rules, they face some stiff penalties.

These include:

• Paying you compensation which could be between one and three times the deposit you paid;
• Being unable to evict you using a Section 21 notice;
• Having to repay your deposit in full before serving a Section 21 eviction notice.

Ensure you use an agent who is compliant!