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Guidance on Tenancy Deposit Protection for Assured Shorthold Tenants

9 November 2021

What is an Assured Shorthold Tenancy?

Assured shorthold tenancies are the most common type of tenancy in the UK. For a tenancy to be an assured shorthold tenancy, it must be the tenant’s main residence and the landlord must not live in the property. The annual rent must be between £1,000 (£250 if not in London) and £100,000 and the property must not be used as a holiday let, for business tenancies, or for lodgers.

What is Tenancy Deposit Protection?

By law, for assured shorthold tenancies that began on or after 6 April 2007, the landlord is legally obligated to protect the tenant’s deposit with a government-authorised scheme. There are two different types: custodial and insurance backed tenancy protection.

A custodial tenancy deposit protection is where the government-authorised scheme holds the deposit for the duration of the tenancy. Whereas an insurance backed tenancy deposit protection is where the landlord or agent holds the deposit for the duration of the tenancy, but if there’s a dispute at the end of the tenancy, the deposit is handed over to the government-authorised scheme. As the scheme is insured, the tenant is protected as they are always guaranteed their money back if they are entitled to it.

How Does It Impact Me?

If you rent in the private sector in the UK, you are likely an assured shorthold tenant and should be aware of your rights when it comes to tenancy deposit protection. The landlord/agent must give tenants ‘prescribed information’ set out in the Housing (Tenancy Deposits (Prescribed Information) Order 2007. This includes the contact details of the landlord/agent and tenant, the rented address, the deposit amount, and information setting out how the deposit can be used. For example, when a tenant does not comply with their obligations. The prescribed information must be given within 30 days of receiving the deposit or the landlord/agent risk being taken to court. 

What Happens to My Deposit at the End of the Tenancy?

At the end of a tenancy, if there is no dispute – either no deductions are made or any deductions the tenant has agreed to – the deposit is returned to the tenant. If there is a dispute, both the landlord/agent and the tenant should attempt to reach an agreement. Within 10 days of the tenant requesting for their deposit back, if no agreement is reached, the tenant has the right to submit their dispute to the government-authorised scheme. Both the landlord/agent and the tenant will submit their evidence and the scheme will appoint an impartial adjudicator to make a binding decision. Normally, this will be done within 28 days of receiving both parties’ evidence. Once the adjudicator has made a decision as to the deposit, the scheme will pay out the money due to each party. The adjudicator’s decision is final.

Tenants should feel comforted knowing that with tenancy deposit protection, not only is their deposit protected, but disputes can be resolved in a quick and efficient manner.

This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Caroline Turner or write to us using the contact form below.

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