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The importance of protecting a rent deposit received from a tenant cannot be underestimated.

Even if the same tenant has been in occupation for a number of years, as from the 6th April 2007, all rent deposits received by/in the hands of landlords or their agents must be protected either by paying it into an approved scheme or by joining/registering with an insurance backed scheme.  It does not stop there.  Details of how the deposit has been protected and who to contact in the event of a dispute must be provided to the tenant (the Prescribed Information).

The reason for this is to prevent landlords from unreasonably withholding part or all of the deposit and, where a tenant is entitled to the return of a deposit in part or full, that it is in fact received by that tenant.  Each scheme has an adjudication service which deals with disputes where the landlord proposes to retain part or all of the deposit as a result of the tenant leaving the property damaged and/or dirty.

The legislation not only seeks to protect tenants by providing a mechanism for dispute resolution but also imposes a penalty on landlords failing to protect deposits: a notice to evict will not be valid where a deposit has been paid but not protected and, on application by the tenant, a court must order that the landlord not only repay to the tenant a sum up to an amount equal to the whole of the deposit but also compensation in a sum up to three times the amount of the deposit.

Ensuring that full inventories and schedules of condition are completed at the beginning of the tenancy will provide valuable assistance to both landlords and tenants, as will well drafted agreements between the parties which provide clear detail on responsibilities for repair and decoration.

For additional information, please contact Fran Woods on 01906 721600 or via email:

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