OpenRent Community

5 week max tenancy deposit - problems with renewing AST

Hi, my tenants would like to re-new their AST agreement with me which I was hoping to do through OpenRent Rent Now scheme. Their tenancy began in March last year, i.e. before the new law of having a max of 5 weeks as a deposit, therefore their deposit was fine as being 6 weeks rent. In the renewal form it gives the current and proposed figures for the rent and deposit. In the proposed deposit box it even gives the original deposit amount which was paid, but when I try to proceed with the form, it automatically gives this statement:

By law the deposit must be less than 5 weeks’ rent. Please see here for a full explanation.

Surely I don’t need to change the deposit, if it’s just a renewal and as the AST was set up before the new law, why is the OpenRent renewal form causing this problem? My tenants’ deposit is safely with the DPS, so surely it shouldn’t be changed? Please could someone shed light on this matter - thank you!

A renewal is treated as a new contract, so the new law applies.

Instead, let the old agreement continue as a rolling one month contract and leave the deposit as is.

If the tenant insists on a longer contract than one month for their peace of mind then you need to refund two weeks of the six weeks deposit and then continue with creating the OpenRent agreement, or your own version if you have one.

In short, refund two weeks worth and create your renewal or do nothing.

Hi Henrietta,

Yes I’m afraid the law requires you to refund any deposit amount in excess of 5 weeks’ rent when renewing. We have made it impossible to renew without doing this to ensure that our landlords do not break the law by taking what would be considered a ‘prohibited payment’ under the Tenant Fees Act, which would come with a £5,000 fine.

I have written a guide on how to make a partial deposit refund, here:

Thank you for your response. Having then read a discussion on this on OpenRent, a landlord said the DPS had clear information on it. I therefore e-mailed the relevant information to the DPS and asked them to refund my tenants a week’s worth of rent. I then changed the deposit amount on the OpenRent renewal AST, from 6 weeks’ rent deposit to 5 weeks’ amount.

Please could you explain why you have suggested refunding 2 weeks’ worth, as opposed to just 1 weeks’ worth?

Many thanks

Hi Henrietta, I haven’t suggested you return two weeks’ rent. Where did you see this suggestion?

Sam

Sorry, Sam, I should have directed my response to ‘John45’. He also gave me some useful information about the new deposit law. Maybe John45 suggested 4 weeks to stay on the safe side.
Thanks again.

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Sam, further to my message below, I meant to thank you for setting out such a clear guide on partially repaying a deposit, much appreciated!

Henrietta

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You’re welcome! :slight_smile: Happy to help

my apology Henrieta: I should have said round down 5 weeks, as advised by my DPS, to avoid a complaint if it was a few pence over the 5 weeks deposit!

No problem John. Sorry, I think at the time I was a bit stressed out with it, but it all seems fine now - thank you! Yes, I did then read about rounding down 5 weeks to avoid complaints. Thanks again!