Issue 154

Advice centre: New Tenancy Deposit Scheme

12th March 2007

Accommodation deposits are big sums of money for students to find. That extra month's rent you need when you move into a new house or flat can be a drain on your resources. And many students rely on the cash boost when they get their money back at the end of a tenancy. If the landlord doesn't return the deposit, that can cause real hardship, (and 30% of deposits were retained either wholly or in part in 2005-6). But hopefully the risk of this happening is set soon to diminish.

Did you know that the rules for the holding of accommodation deposits are changing on April 6 2007?

Bear in mind, when you make your accommodation plans for next year, that deposits after this date will no longer be held by the landlord him/herself, and this could be a big help to students. This is the result of the Housing Act 2004, and represents an attempt to offer better protection to tenants for their deposits Under the new scheme, when you pay your deposit, either directly to the landlord, or to an accommodation agency, it will have to be forwarded within 14 days to a new independent body - the Deposit Protection Service.

You should receive confirmation of this in writing from them. They will hold the deposit for the benefit of both landlord and tenant, and return the money at the end of the tenancy. At the end of your tenancy, if you disagree with your landlord about any deductions, this will be decided by an independent Alternative Dispute Resolution service (or the courts) and the DPS will reimburse both parties. Full evidence will be required for this, so if you want to prove you didn't leave a mess, or did replace damaged items, it might be an idea to take some photographs.

Hopefully this will spell the end to a situation where landlords routinely deduct sums from deposits, for instance for cleaning. They will now have to justify why they want deductions made, and show invoices for work done.

If you have signed a tenancy agreement before April 6, it won't be covered by these new regulations; but if you haven't, it could be worth considering delaying the signing of your tenancy agreement until after then, as you will get greater protection under the new law. If you are house hunting after this date, make sure your landlord knows about the scheme; he must comply by law, and could face a fine of three times the value of the deposit if he doesn't.

For more information, or in the case of problems with deposits or any other accommodation problems, come to the Advice Centre for help on the ground floor.

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