How much is a deposit these days? It can be one month down, one month in advance. It can be 3 months down, 3 in advance. It very much depends on the property and the area, and the relationship between tenant and landlord.
With more properties to rent than buy, and more people looking to rent than buy, the rental market is growing fast. Before tenants can move in to their property there are checks, references, and that large deposit. Tenants hand over in excess of £1,000 (which is a large sum of money for anyone) and that secures the place. But how do you know you are getting it back?
Tenancy deposit legislation was implemented on April 6th, 2007, and it protects renters by making it illegal for landlords and rental agencies to wrongfully retain a security deposit.
Deposits are safeguarded for the duration of the lease and will be returned to the tenant if they:
- comply with the conditions of the lease
- do not endanger or damage the property
- settle the rent and utility charges
Landlords may feel like they can’t be trusted with deposits, but the money in the deposit belongs to the tenant, not the landlord. Deposit protection eliminates the need for trust, making the landlord-tenant agreement entirely transparent. When a tenancy deposit is paid on an assured shorthold tenancy, the landlord or leasing agency has 30 days to secure the deposit using a government-backed tenancy deposit plan.
This offers the renter a reason to take care of the property. But landlords and agents should know what their legal responsibilities are when they take a deposit from a tenant.
How Much Should A Renter Put Down?
Tenancy deposits are currently restricted to the equivalent of 5 weeks rent unless the yearly rent exceeds £50,000, in which case the deposit may be up to 6 weeks rent.
Where should deposits be kept?
In England and Wales, there are two kinds of landlord tenancy deposit schemes: custody-based and insurance-based. The renter pays their deposit to their landlord or agent as normal at the outset of a new rental arrangement. After that, the landlord or rental agency must safeguard it by registering it in a government-approved tenant deposit system.
At the end of the tenancy, a renter should ensure that the property and its materials are in the same condition as when they moved in, with reasonable wear and tear taken into account. Both renter and landlord should also make sure that rent and any other bills are cleared. Then decide with your landlord or agent how much of your security deposit you should get back.
Be good and get it all back, and then you have the deposit for your next place!