With the start of the new academic year, University students around the country are moving into private rented accommodation or renewing existing tenancies.
Whether you own just one or a handful of rental properties, student lettings can provide a healthy stream of income. But if you don’t handle your tenant’s deposit properly, you could be opening yourself up to severe financial penalties.
By law, any deposit paid in relation to an assured shorthold tenancy agreement (yours almost certainly is one of these) must, within 30 days of receipt, be registered with an approved holder such as the Deposit Protection Service or the Tenancy Deposit Scheme.
That is not the end of the story. To fully protect a deposit a landlord needs to provide ‘prescribed information’ to the tenant, also within 30 days. The consequences of failing to do this are harsh, as the tenant will automatically become entitled to compensation of between one and three times the value of the deposit. Additionally, you will not ordinarily be able to give the tenant notice to leave the property until you have returned the full deposit. This is bad news if there is any damage to the property as you will not be able to make any deductions for the costs of repair. You will also not be able to re-let the property until any court proceedings have been brought to an end, potentially costing you even more money in lost rent and legal fees.
The lesson: make sure you know your legal obligations as a landlord. If at any time you are unsure, it is always worth seeking professional legal advice.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.