DEPOSITS & TENANCY DEPOSIT SCHEMES - A GUIDE FOR LANDLORDS
When letting your property make sure you ask for a suitable deposit to protect you from damage to your property or missed rental payments. Read on to for the do’s and dont’s including how to register for a TDP (Tenancy Deposit Scheme)
How much should the deposit be?
- It is normal to ask for a new tenant to pay a deposit to the value of between one month and six weeks rent
- Make sure that your requirements are made clear from the start – the new tenant must be clear on the exact amount the landlord will be taking
When is the deposit paid?
- The deposit should be taken before the commencment of the tenancy
How do I take payment?
- Once a landlord begins the process of setting up a new tenancy via their Lisa landlord account, the tenant will receive an automated email inviting them to become a tenant and to authorise their tenant. This email will ask them to set up direct debit details for the deposit and monthly rent via Lisa’s Go Cardless online payment system
- When the tenant authorises their tenancy they are agreeing to pay the required deposit. The payment will be set up automatically and linked to the landlord’s Go Cardless account
- Landlords can check their Lisa dashboard for notifications and will recieve an email notification if there are any issues with the payment
- Landlords can also log into their Go Cardless account to view details of pending deposit payments and if necessary can make ammendments or cancel the payment up to two days before payment is due to be made
What do I do with the money once I receive it?
- Within 30 days of receiving the payment, landlords must pay the deposit into a government backed Tenancy Deposit Scheme (TDP)
What is a TDP?
- A TDP is a government registered Tenancy Deposit Scheme. This acts as a custodian of the deposit money for the duration of the tenancy
- A TDP ensures protection for both tenant and landlord
How do I set up a TDP?
- We recommend signing up to the not for profit Tenancy Deposit Scheme which is easy to use and doesn’t charge any fees www.tenancydepositscheme.com
- It is a straight forward process of registering the property, tenant and deposit details and then simply setting up a bank transfer
What happens at the end of a tenancy?
- When the tenancy has ended the tenant and landlord must agree how much of the deposit will be given back based on an inspection of the property and review of the terms of the tenancy agreement
- Once the amount is agreed, the deposit must be returned to the tenant within 10 days
- If there is a dispute then the deposit is protedted under the TDP scheme