Deposits

What is a rental deposit?

A rental deposit (also known as a ‘security deposit’) is money that a tenant pays either to a letting agent or directly to a landlord when wanting to secure their chosen property to rent.  

Initially, the partial payment of the rental deposit enables the property to be removed from the marketplace, however the main purpose of the money is to protect the landlord against any possible future financial loss. Examples of this might include the tenant failing to pay the rent or damaging the property in some way (outside of usual ‘wear and tear’) during the tenancy.  
 

When are they payable?

Rental deposits are paid in full at the start of the tenancy and apply to both commercial and residential rentals.  

It’s common for the amount payable to equate to the sum of at least one-and-a-half or even two months’ rent. And for tenants who want to keep pets, there can often be an even larger deposit amount to pay. 
 

What happens to my deposit after I’ve paid it?

If you’re a tenant renting a property in England or Wales, there are certain things your letting agent or landlord must do once you’ve paid your rental deposit: 
 

• They must start keeping the money in a deposit protection scheme within 30 calendar days of receiving the payment from you.
• They must also inform you about the important details of the deposit scheme they’ve chosen, by sending you ‘Prescribed Information’. They must do this within the same 30-day period. This can be shared with you via email and/or the information being sent through the post.

When will I get my money back?

The process of returning of your rental deposit begins soon after your tenancy has officially ended.  

When you vacate the property, a representative of the letting agent (sometimes an ‘independent’ clerk) or another representative of the landlord will visit - usually on the day you move out – to inspect and assess the condition of the property (and any inventory items).  
 

The amount of money you are refunded depends on the final condition of the property when you officially leave. The value of any missing items from the inventory, along with any non ‘wear and tear’ damage will be deducted from the rental deposit amount.  

If your landlord or letting agent proposes deductions to the rental deposit amount, you have the right to contest them. If both parties are unable to agree on the final amount, then there are impartial dispute resolution services available to help you resolve the matter. 

Otherwise, if you’ve left the rental property in good condition and it’s also clean and tidy (i.e. ready for the next tenant to move into), it’s extremely likely that you’ll get 100% of your rental deposit refunded back to you (this must be initiated by the letting agent or landlord within 10 working days of the final refundable amount being agreed on in writing, by both parties).