Q. I am a new landlord renting a property what should we do with the deposit?
A. If the property is let under an Assured Short Hold Tenancy Agreement, then any deposit received by the landlord or his agent must be protected within a recognised Tenancy Deposit Protection Scheme. There are three authorised deposit schemes, namely, the Deposit Protection Service, Dispute Service, and Mydeposits.
The landlord is also under an obligation to provide the tenant with information giving details of the amount of deposit paid and address it relates to, a leaflet explaining the scheme rules, contact details for the landlord or agent, details of the deposit protection scheme used, how the tenant can get the deposit back, and what happens if the tenant and landlord do not agree.
If you as landlord fail to protect the deposit within 30 days of receipt of the deposit and/or fail to give the tenant the information, you will be liable to pay the tenant compensation of between one and three times the amount of the deposit.
What is more important, if you fail to protect you may not be able to pursue a claim for possession of the property pursuant to section 21 and may have to refund the deposit in full before being able to use a Section 21 Notice.
The law surrounding deposit is complicated and can lead to tenants pursuing landlords for compensation. Tread carefully and seek advice.