All tenant deposits are in place as a security measure. The law states that a maximum of 5 weeks rent can be taken and held securely in a pre-approved deposit scheme. What can the deposit be used for?
Any damage which has been caused by the tenants which exceeds fair wear and wear, can be claimed for against the tenants’ deposit. As long as the cost is valid and agreed to by both parties, then deductions can be made.
Any remaining, unpaid or missed rent can be taken from the security deposit once the tenancy has ended. However, if the total unpaid rent amount exceeds the deposit amount, then you can take legal action against the tenant. Remember, this will incur legal costs so you must work out what makes best sense for you, financially.
In the world of tenancy deposits, this point is generally the most common which is disputed. Sometimes disagreements can take place, largely because we all have different definitions of what is ‘clean.’ As long as we stick to the inventory as evidence and ensure we photograph any ‘discrepancies’ during check out process then a valid deduction can be made.
Remember, once the tenant deposit is received, you must make sure that it is protected in an approved scheme. If you use a managing agent, then they will protect the deposit within 14 days and give you specific written information within 28 days. The scheme administrators must hold the deposits in special bank accounts, regulated by the Financial Conduct Authority, to make sure your money is safe.
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