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Private housing: paying a deposit

Most tenants of privately rented accommodation are asked to pay a deposit or some other payment in advance. There are three kinds of payment in advance that you may be asked for:

• Charges made by an accommodation agency
• A deposit
• Rent in advance

Accommodation agency charges

The Accommodation Agencies Act 1953 says that no agent should charge you a fee until they have found you a home.

• Do not pay to have your name and details put on a list
• Do not pay for a list of addresses, or details of places to let.

In fact it is a criminal offence for anyone to take a payment when you are looking for accommodation even if it will be given back to you if you do not get somewhere to live.

What they can charge for:

• Finding accommodation that you accept
• Drawing up tenancy agreements
• Preparing an inventory

What is an inventory?

An inventory is a written list of the contents and the condition of the property. Check whether anything is missing or damaged and make a note of it before you sign it. Your landlord must sign it too.

If you are not given one then make one yourself and get an independent witness to sign it as well. You could also take photographs (put the date on the back) to show the condition of the property when you moved in. This could be helpful if there is a dispute when you move out.

A deposit

A deposit is a payment that is paid to the landlord before you move into the property.

From April 2007 the landlord will be legally obliged to register with a Tenancy Deposit Protection Scheme.

This means that the landlord has to either:

• Place your deposit in a Deposit Protection Scheme within 14 days of receiving it, and provide you with details of the scheme protecting the deposit. At the end of the tenancy the landlord and you (the tenant) agree repayment of the deposit and inform the scheme administrators. The deposit repayment is then made as agreed within 10 days. If there is a dispute the Deposit Protection Scheme, an independent arbitration scheme, will intervene to resolve the situation. This type of scheme is known as a Custodial Deposit Scheme.

Or alternatively

• Hold your deposit and notify the scheme administrator that they have your deposit and that it should be protected. At the end of the tenancy the landlord and you will agree what happens to the deposit. If you are dissatisfied, you can complain to the Scheme Administrator and the landlord will have to place the disputed amount of money with the Scheme Administrator until the dispute is resolved. This is an Insurance Based Scheme, of which there are two different options for the landlord.

The amount of the deposit would normally amount to 1 – 2 month’s rent. Always get a signed, dated receipt for the correct amount of the deposit. This may be part of the tenancy agreement, or a separate document.

Also see our leaflet Thinking of privately renting 248kb A guide to the rent deposit bond guarantee scheme and rent in advance for a guide to the rent deposit bond guarantee scheme and rent in advance.

When your tenancy is coming to an end:

• Clean up and make good any damage you may have caused
• Make an appointment with your landlord for an inspection
• Check the inventory
• When you return the keys, arrange to collect your deposit

Rent in advance

Your landlord will probably ask for four weeks' rent in advance. If you cannot afford this you may be able to negotiate a smaller amount such as two weeks. It would not usually be more than two months' rent. Get a written receipt or make sure it is clearly noted in your Rent Book. Remember, if you pay rent in advance at the beginning of the tenancy, your rent payments will always be due in advance.

If you need any further advice or information please contact us.