Deposit protection for joint tenancies

Why is this guide important?

If you take a deposit relating to a joint and several tenancy agreements, you should familiarise yourself with our insured process to make sure that the deposit is protected correctly, including our key requirement to appoint a ‘lead tenant’.

This guide should be read in conjunction with our Membership rules.

Other authorised tenancy deposit protection schemes may have different rules and processes relating to deposit protection of joint tenancies. This guide relates to our processes only.

What is a joint and several tenancy agreement?

A joint tenancy agreement is created when two or more adults sign a single agreement, for the same length of time, to live in the rented property. They are collectively classed as a single tenant and will all be jointly responsible for the terms and conditions of the tenancy agreement, which is known as joint and several liability.

Strictly speaking, a joint tenancy is limited to a maximum of four people (although many agreements include more than four) and each person has full use of the property and equal rights under the tenancy.

What happens to the deposit under a joint tenancy?

In line with the Tenant Fees Act 2019, a single deposit can be taken for the tenancy, equivalent to no more than five weeks’ rent if the annual rent is less than £50,000 and six weeks’ rent if the annual rent is £50,000+. How many of the tenants contribute to the deposit is up to them and is most often split equally. At the end of the tenancy, the joint tenants are entitled to have their deposit refunded. However how it is distributed is up to the tenants, although many landlords do refund the deposit in the same way they received it e.g. if they received it in parts from individual tenants, this is how it is returned. Any specific requests the tenants may have, on how the deposit is to be refunded, should be agreed in advance and clearly documented.

How do we deal with joint tenancy deposits?

The landlord is responsible for telling us the names of every tenant listed in the tenancy agreement when protecting the deposit.

Once protected, the landlord must provide the tenants with a copy of the protection certificate and the prescribed information. If there are any mistakes or omissions, such as one tenant’s name missing, the tenant should tell the landlord and ask the landlord to inform us.

What is a ‘lead tenant’ and what is their role in deposit protection?

As we do not require the landlord to provide every tenant with separate documents confirming the deposit protection details, we only ask that the landlord nominate a ‘lead tenant’. The landlord must make sure that all the tenants agree to the person named as lead tenant, who will then be responsible for receiving all documents we send, and act on behalf of all tenants in dealing with us during the tenancy.

What happens if the lead tenant leaves or the tenants wish to change the lead tenant?

The landlord should inform us immediately when a new lead tenant has been appointed and we will update the tenancy details and the prescribed information which is then reissued, with the name of the new lead tenant.

We do this free of charge and the deposit remains protected at all times.

A new tenant has replaced one of the original co-tenants. Is the deposit still protected?

If the new tenant has simply replaced an existing one and all the other details of the tenancy are the same, the existing deposit protection will continue to be valid. However, the new tenant and the old tenant should draw up and sign a ‘deed of assignment’ to amend the contract.

It is essential that the landlord is involved in this process and make sure:

  • the incoming tenant agrees to take over responsibility for the deposit with the outgoing It is common practice for the incoming tenant to pay the outgoing tenant the equivalent share of the deposit
  • they inform both the new and old tenant of any intended deductions from the deposit at the end of the tenancy. If this is not done, the incoming tenant may have a strong case to dispute any proposed deductions for contract breaches committed before moving in, despite being joint and severally
  • we are informed of the change and provided with a copy of the deed of assignment. We will then confirm if the protection is still valid and amend the prescribed information. The landlord must then reissue it to the tenants who are required to confirm it is

What happens if there is a dispute at the end of a joint tenancy?

We will only accept a dispute from one of the tenants on behalf of all tenants, as we only recognise a single deposit protection and are unable to accept disputes for separate “shares” of the deposit.

Where this person is the lead tenant, we recognise the authority assumed by them at the start of the tenancy.

If one of the other tenants raises a dispute, it will be on the understanding that they:

  • have the express authority and acceptance from all co-tenants, including the lead tenant, that the dispute is being raised on their behalf and
  • the nominated tenant is responsible for distributing the money if they are entitled to a share of the disputed amount

One of the tenants is no longer in contact with any of the co-tenants. Can they still raise a dispute?

When a tenant raises a dispute they must declare that they accept responsibility for dealing with the dispute and this must be agreed by all the tenants.

We will then proceed with the dispute, and make a decision based on the evidence, but you must be aware that the tenant is responsible for distributing any money awarded.

There may be circumstances where a tenant raising a dispute is asked to sign the form as well as the co-tenants.

We are unable to get involved with disputes between tenants on how the deposit is allocated.

All but one of the co-tenants have agreed on how much of the deposit should be returned. Can that tenant still raise a dispute?

In this instance, the tenant will need to provide us with evidence of why they wish to raise a dispute and the amount of the deposit they wish to dispute. The co-tenants will then be asked to confirm that they do not wish to use our dispute resolution service in relation to this tenancy and accept that they will be unable to do so in the future, irrespective of the adjudication decision.

A tenant wanting to dispute more than their “share” of the deposit should be aware that, while this may be possible, the adjudicator will consider the evidence from the landlord as well as any robust agreement from the other tenants on their share of the deposit making this an unlikely possibility.