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Landlords! Have you forgotten to protect your tenant’s deposit?

November 20, 2019 by Tessa Shepperson

Deposit Error Repair KitOne of the most common problems I come across when advising landlords is finding they have not protected their tenant’s tenancy deposit.

  • Sometimes it is because they did not know they had to
  • Sometimes it is because they had agreed to take the deposit by instalments and thought they could wait until all the payments had been made
  • Sometimes it is because they simply forgot about it

Even if you are usually super careful about protecting the tenancy deposit, there is always going to be just that once when you slip up.

Failing to protect the tenancy deposit

However, there is in law no excuse for not protecting the deposit in time.  None.  No matter what the reason:

  • You will not be able to serve a valid section 21 notice, and
  • Your tenant can bring a claim against you for up to 3x the deposit sum.

If you want to evict your tenant, the only thing you can do is refund the tenancy deposit money (nothing will protect you against a claim for the penalty).

It’s not that easy though.  For example:

  • What is the best way to refund the money?
  • How can you prove that you have done it if the tenants claim you haven’t
  • What if you have recently protected the money (late)  in a custodial scheme?
  • Do you still have to refund the money if the tenant owes you rent?

The Deposit Error Repair Kit

As the problem is so widespread,  I wrote an online kit, which I called the Deposit Error Repair Kit (a silly name but it seems to work).

It was originally launched a few years ago and I have recently updated it and moved it over to our new Landlord Law Services site.  You can read about it here.

About the Kit

It’s quite a comprehensive kit.  Indeed when I got down to it, I was surprised at how much there was to write about.

  • I talk about what you should do  about refunding the tenancy deposit money and provide letters, forms, and a checklist
  • I go into quite a lot of detail about the prescribed information and what exactly it should consist of.
  • I also have quite a big section on the law. I take a look at the words of the legislation itself and explain it so you can see clearly what you need to do and why.
  • There is a ‘bonus’ section introducing section 21.  That was something suggested by one of my Beta testers who said she did not really understand what section 21 was all about.  There is another bonus section at the end where I talk about the changes that have taken place recently.
  • I also take a look at the penalty and consider what sort of awards a Judge is likely to make in different situations and what you should do if your tenant brings a claim against you.

I’m quite proud of the kit actually and I was delighted to see that most of my Beta testers liked it:

“Clear, practical guidance on what to do if you have not protected deposits correctly – and on how to comply fully with the regulations and save yourself trouble next time”  Liz N.
“A useful kit, if you have any doubts about a deposit or just want to increase your overall knowledge then this kit is for you. Its also great to use a refresher training for staff members. Asad Khamisa”

And finally

Tessa’s “Deposit Error Repair Kit” is a must have course for both landlords and agents alike. Even if you are a landlord that uses a managing agent…you still need to know this stuff just in case your agent doesn’t…and believe me many don’t and those that do or should do are human and still make errors.

The trouble is that it is YOU as the landlord that carries the can when things go wrong. So…don’t let it happen to you…know what the law is and what to do to properly protect a tenant’s deposit (and protect yourself) and then you know either what to do yourself (if you self manage your properties/tenants) or what your agent should be doing…then you can keep an eye on the agent so things don’t go wrong.

Remember…if you get deposit protection wrong…it could prove to be a very costly mistake in more ways than one. The investment you make in this kit could save you thousands of pounds and help you to avoid loads of stress! Gareth C Thomas, Self-managing private landlord

Buying the kit

The kit is £70 and you get what is called ‘lifetime access’ which means that as long as the kit remains online – you can use it.  Which could be a very long time.

You can get it here.

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IMPORTANT: Please check the date of the post above - remember, if it is an old post, the law may have changed since it was written.

You should always get independent legal advice before taking any action.

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About Tessa Shepperson

Tessa is a specialist landlord & tenant solicitor and the creator of this site! She is a director of Landlord Law Services which now hosts Landlord Law and other services for landlords and property professionals.

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