Landlords using letting agents

Expert advice:

A guide for landlords using letting agents

If you’re a landlord entrusting your letting agent with mydeposits insurance-based protection for your tenant’s deposits, this information is crucial for you. We’ve put together a guide to ensure you’re well-informed about government-authorized deposit protection, fair wear and tear, and other essential aspects.

What you need to know:

  • 1. Government-authorised deposit protection explained

    Since April 6, 2007, all landlords and letting agents in England and Wales who accept a deposit from a tenant on an assured shorthold tenancy (AST) are required by the Housing Act 2004 to protect it in a government-authorized deposit protection scheme within 30 days of receiving it. The deposit remains the tenant's money, ensuring a fair return at the end of the tenancy, given that the terms of the tenancy agreement are upheld.
  • 2. Understanding deposit protection schemes

    There are two types of government-authorized deposit protection schemes:
    •Custodial scheme: The deposit is held by the scheme until the end of the AST.
    •Insurance-based schemes: Landlords or agents hold the deposit, paying a fee to the scheme for protection. If a deposit dispute arises, the disputed amount is lodged with the scheme until resolution.
  • 3. Introduction to mydeposits Insurance-based scheme

    With mydeposits, landlords and agents can opt for an insurance-based deposit protection scheme. A deposit protection fee is paid to protect each tenant's deposit. This setup allows landlords to retain the deposit in their bank account throughout the tenancy, returning the agreed amount at the end of the lease. mydeposits safeguards the tenant's deposit in a segregated bank account, intervening only in case of a dispute.
  • 4. Key responsibilities for landlords

    Even if a letting agent is involved, the landlord maintains ultimate legal responsibility for the deposit. This responsibility includes ensuring proper protection and providing "Prescribed Information" to the tenant within 30 days of deposit receipt.
  • 5. Dealing with agent-related challenges

    In cases where letting agents default or become insolvent, landlords remain liable for the deposit's return. Undertaking financial checks on agents, ensuring proper protection, and employing reputable agents can mitigate risks.
  • 6. Navigating disputes and changes with agents

    Should a deposit dispute arise, mydeposits offers an evidence-based dispute resolution service between tenants and agents. Changing agents during a tenancy requires seamless transition and proper deposit protection continuity.
  • 7. Data protection and compliance

    Rest assured, mydeposits ensures data protection in line with regulations and provides full transparency in processing information.

Remember, as a landlord, being well-informed about deposit protection, agent responsibilities, and potential challenges is key to ensuring a smooth and compliant renting experience.

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Protect your deposit today.

If you have taken a cash deposit, you must protect it in a government authorised scheme within 30 calendar days.