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  • Deposit Protection

    Change in deposit rules

    We have rented a house for £1800 pcm last year and took a 6 week deposit.

    I understand that the maximum allowed now if 5 weeks?

    So do I need to return 1 weeks deposit?

    If so, presumably I need to create a new deposit certificate?

    Is it normal to charge a tenant for the deposit protection fee?

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    As I understand it, the new rules only applies to deposits taken from June 1st 2019 on wards. So no to returning 1 weeks deposit.

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    That's my understanding too.

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.

    The rules apply to new tenancies and renewals awarded after 1ST June 2019. However, there is a one year grace period and then the 5 week cap will apply to all existing tenancies (so with an existing tenancy that is periodic they will need to have their deposit difference refunded by 1st June 2020)

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    Incorrect.

    https://www.gov.uk/government/publicatio...9-guidance

    See page 30.

    No need to return deposits on existing tenancies - unless a new contract is signed.

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.

    Beat me to it, was just posting below in reply.....

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    Thanks for the clarification on periodic tenancies that makes things a hell of a lot easier Smile

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    P30/31 https://assets.publishing.service.gov.uk...Agents.pdf

    Q. If a tenant paid a tenancy deposit which exceeds the cap before 1 June 2019, do I need to re-pay the amount of the deposit above the cap?

    No. Landlords and letting agents are not obliged to immediately refund part of a tenancy deposit that is above the cap but was paid before 1 June 2019. If a tenant signed a tenancy agreement before 1 June 2019 (and that tenancy is continuing or is a statutory periodic agreement) then the tenant will be bound by the terms of that contract until it is either renewed or terminated.

    Q. What is the transition period? How will it apply to me?

    There is a 12 month transition period from 1 June 2019 to 31 May 2020. This is to allow time for landlords and letting agents to renegotiate their agreements. From 1 June 2019, any provision which breaches the ban in a continuing tenancy agreement which was signed before this date continues to be legally binding on the tenant. This includes continuing assured shorthold tenancies, tenancies of student accommodation, licences to occupy housing and statutory periodic tenancies which arise during the transitional period from a fixed term which was signed before 1 June 2019. This means the tenant will continue to be liable for any payments agreed to in the tenancy which might occur within this transitional period.

    Q. What happens after the transition period?

    From 1 June 2020, any provision in continuing tenancies that breach the fee ban or deposit cap will no longer be legally binding. This includes continuing assured shorthold tenancies, tenancies of student accommodation, licences to occupy housing signed before 1 June 2019 and statutory periodic tenancy agreements arising during the transitional period from a fixed term signed before 1 June 2019. 31 A landlord or agent does not need to immediately return any part of the deposit which is in excess of the cap (as this payment was not made after the cap came into force). However, you will be required to refund the deposit at the end of the tenancy in the usual way and any new tenancy agreed after this will need to comply with the new tenancy deposit cap.

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    You beat me to it, SKS, as I wanted to ask for advice on the very same topic. So, rather than create a new post, I thought I would add my queries here, Hope that's ok.

    1) A one-year AST agreement expires in August with 6 weeks deposit taken. If the tenant renews, would I be right in thinking a new dpc needs to be created with a refund of one week's deposit? When I did this before, the deposit was re-registered, a new certificate produced and served and obviously as the money was the same one did not have to worry about that.

    2) If the tenancy becomes periodical, does one week's deposit have to be returned by 31 May next year? (I think that is what I understood from the above posts, but the Government guidelines were a bit confusing, for me anyway).

    3) I have another property where a three-year AST agreement expires in May 2021 with 6 weeks deposit taken. Would I be right in thinking then that one week's deposit has to be returned by 31 May next year?

    4) For the first time in many a year it is the LA and not I that is holding the deposit. Could there be repercussions against me were they to fail in refunding any deposit differential due?

    Thanks in advance,

    Happy Landlord


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    1) A one-year AST agreement expires in August with 6 weeks deposit taken. If the tenant renews, would I be right in thinking a new dpc needs to be created with a refund of one week's deposit? When I did this before, the deposit was re-registered, a new certificate produced and served and obviously as the money was the same one did not have to worry about that.

    Yes if the tenant renews and it's a new AST / No if it roll's onto a periodic tenancy

    2) If the tenancy becomes periodical, does one week's deposit have to be returned by 31 May next year? (I think that is what I understood from the above posts, but the Government guidelines were a bit confusing, for me anyway).

    Correct, No

    3) I have another property where a three-year AST agreement expires in May 2021 with 6 weeks deposit taken. Would I be right in thinking then that one week's deposit has to be returned by 31 May next year?

    No unless the tenant renews and it's a new AST, if continues as periodic fine

    4) For the first time in many a year it is the LA and not I that is holding the deposit. Could there be repercussions against me were they to fail in refunding any deposit differential due?

    I don't believe so but best check with the deposit scheme the deposit is held in, either way irrelevant unless a new AST is created.

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