OpenRent Community

Maximum Tenancy Deposit: the New Rules and How to Calculate 5 Weeks' Rent

Originally published at: https://blog.openrent.co.uk/maximum-tenancy-deposit-the-new-rules-and-how-to-calculate-5-weeks-rent/

From 1st June, landlords will only be able to take five weeks’ rent as a tenancy deposit. This increases to six weeks for properties whose rent exceeds £50,000 per year. Tenancy Deposit Calculator We have developed a calculator to quickly tell you the maximum tenancy deposit you can collect after the Tenant Fees Act commences…

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If you want to “round off” you must round down and not up. If you round up you will be breaking the law as you are charging more than 5 weeks rent (even if it is by 1p).

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Really good point, Clive!

We’ve updated the tool to make sure it always rounds down. Cheers Clive!

If we collected six weeks under the old rules, do we need to return one week now?

Yes if you renew before 1st June 2020. From 1st June 2020, you’d need to make sure any deposits were a maximum of 5 weeks’ rent.

Thanks!

Will OpenRent handle that automatically?

Hi Shaun,

We transfer the deposit to the landlords name as part of Rent Now, so we’re not able to handle this for landlords.

If you’d find it useful, however, we could produce a guide on how to do it and when it needs to be done by?

Sam

That would be great - anything to help would be appreciated! I don’t want to run afoul of the law without even knowing it!

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I’m looking for one bed flat for rent in Leicester must except housing benefit could you please let me now thank you so much Susan.

OK Shaun, will get the team to write something up!

Hi Susan, you can search all our properties here:

https://www.openrent.co.uk/find-flats-and-houses-for-rent-online

Please how can I order a copy of my reference report because it was only sent to the landlord

Thanks

Hey Gbemisola,

I’ll send you a message, as this is perhaps a bit tangential for this thread!

Sam

How do pet deposits work in conjunction with security deposits? I…e. if I agree with the tenant a 5 week security deposit, and an additional 2 week pet deposit. Presumably this is standard practice if clearly set out in the tenancy agreement?

Hi Rob,

After 1st June, tenancy deposits of over 5 weeks’ rent are prohibited, so this kind of thing won’t be possible anymore.

Sam

Hi Sam - is there a better way to deal with pet scenario then under the new rules?

The only way to cover pets is to agree with the tenant an increased rent.

Hi. I just want to clarify that this is only from 1st June going forward?
As an example, I have taken a £1000 deposit from one of my tenants in January this year, the new ruling would mean I can only take £951 deposit (£825 monthly rental). I just want to make sure I am not meant to be refunding £49 to the tenant?
(I had a look on the DPS website and there is no option for a partial refund in this way).
Many Thanks! Scott.

Hi Scott,

There’s no need to refund the excess deposit until 1st June 2020 unless you renew the tenancy before then.

Sam