Question: My daughter is at university and has to move out of her halls of residence in the summer. She has found a house to share with two other girls in Clapham. They have agreed the rent with the landlord but he has asked them to each make a deposit into his personal bank account, which seems strange to me. I thought that deposits had to be paid into a special account. What is the correct procedure?
© Merrily Harpur
Answer: The girls should enter into an assured short-hold tenancy with the landlord. Where a landlord or letting agent receives a deposit from a tenant in respect of an assured shorthold tenancy, then that deposit must be safeguarded within one of the government-authorised Tenancy Deposit Protection (TDP) schemes.
The following organisations provide government-backed schemes — the Deposit Protection Service; MyDeposits; The Dispute Service and Capita Tenancy Deposit Service.
The purpose of a TDP scheme is to protect a tenant's deposit and to ensure the return of the deposit at the end of the tenancy. The return of the deposit is obviously dependent upon the tenant not breaching any of the terms of the assured shorthold tenancy agreement.
Do note that the landlord must still use the TDP scheme even if the deposit is being paid by you on behalf of your daughter.
Further, if your daughter only pays the landlord a holding deposit then the landlord does not need to protect the deposit, but once an assured shorthold tenancy agreement is entered into, then the holding deposit becomes a "proper" deposit and has to be protected by a TDP scheme.
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These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.