Whether you are a tenant or a landlord, read this guide to understand how these compulsory schemes operate
Few things have caused more ill feeling between landlords and tenants over the years than deposits. In the bad old days, some landlords would demand a hefty deposit from tenants, then return only a fraction of the deposit at the expiration of the tenancy, citing ‘wear and tear’ to the property. And the tenants, in many cases, would just have to grin and bear it. Bang went most of their deposit and they would have to scramble around for money to put down as a deposit for a new home.
Now, thanks to compulsory deposit schemes introduced by the government, the system is far more transparent and equitable to both parties. Whether you are a landlord or a tenant, you will need to familiarise yourself with these schemes. Here are 12 points to understand or consider.
1. Deposits are paid at the outset of a tenancy and are typically equivalent to one month’s rent – occasionally more. They are designed to cover such things as damage to a property, cleaning and unpaid utility bills.