Maximum Tenancy Deposit: How to Calculate Five Weeks' Rent Under the New Rules

News & Updates
21

Hi Sam,

I am renewing my tenancy agreement as we speak but there is no option to partially refund the deposit.

The Tenant doesn’t want me to refund them the full amount as they will have to go to the bank to set up the payment, which is a hassle for them, as they do’t do online/internet banking.

This is a real pain, as the Tenant is happy with the amount, they suggested it, and they are stating this will inconvenience them.

How can I make this easy for everyone?

Thanks,

Nick.

22

Hi Nick,

You’ll need to contact the deposit scheme you are using for assistance with this.

Our Rent Now service registers deposits with DPS and you can reach them here.

Sam

23

Hi Sam, I need that guide asap please, to part refund the security deposit before Nov 9th.
Thanks
Lorraine

24

Hi Lorraine, every deposit scheme now has its own detailed guidance on how to return deposits to remain compliant with the Act. Which scheme are you using?

25

Hi Sam, we’re using DPS through Open Rent. However, I cant find anything on their app that explains the process of complying with 5 weeks rent by making a partial refund. Thanks Lorraine

26

PS I’m feeling very frustrated and fed up, there is no clear guidence here, no guidence on the DPS app only how to refund the full deposit, and they have not replied to my enquiry.

Do I make a full refund but deduct the new amount as the security deposit. Would a deduction be kept as a deposit by DPS and would it be protected, or paid to me? Or do I need to make a full refund and then ask the tenants to pay the reduced security deposit amount? What protection is there for landlords if the tenant refuses to pay the new deposit? If they pay the deposit is it to me or Open Rent or directly to DPS? Would the new deposit to DPS be protected? What is the process? Thanks Lorraine

27

Can you provide any answers to my list of questions at all? Thanks

28

Hi Lorraine,

You only need to return any excess amount if you are renewing the tenancy. If your’e not renewing the tenancy, there’s not need to return the excess until 1st June 2020.

The DPS really are best placed to help with this, as will become clear as I attempt to answer your questions.

Great — we will have transferred the tenancy deposit into your name when we set up the tenancy in Rent Now. If you need to return part of your deposit, you can contact DPS for detailed help on how to proceed with your specific tenancy deposit return. I’m sorry if they’ve not replied to your message, but there’s not much I can do about that I’m afraid.

It depends if you are renewing or not, if you are adding new tenants or not, etc. So it’s hard to say without all the info for your new tenancy and your current deposit account.

I’m not sure what you mean by a deduction here.

If you’re setting up a new tenancy with new tenants, you’ll need to make a full refund, yes. If you are renewing, you will only need to return the excess. It depends on the specifics, which is why DPS are best placed to help.

A tenant would only be able to not pay the deposit if it was returned to them. You only need to make a partial return if you are renewing. If you are creating a new tenancy, then the deposit is usually a condition of the let, so the protection is that the tenancy will not go ahead.

OpenRent only handles deposit money at the beginning of a new tenancy within Rent Now. Apart from that, what happens depends on how you proceed with DPS.

It depends on the things mentioned above:

  • renewing or not
  • adding new tenants or not
  • new tenancy or not
  • size of old deposit
  • rent of property

As you can see, there many moving parts, and the DPS are best placed to help you, since the deposit is in your name, and registered with them.

Sam

29

Hi Sam

Thanks for your reply. I managed to get through to someone at DPS, third time lucky.

On their home page is a link to an article “The Tenant Fees Act and tenancy deposit cap” from there you can click “Download the Deposit Cap Calculator” which is a form the landlord can fill in to make a partial refund.

I hope this info helps anyone else with DPS that needs to do the same.

Lorraine

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30

Hello
I let my property last year but the tenant’s credit check had failed so he agreed to put more deposit. Now property agreement is due for renweal but openrent website is not letting me propose the agreement to tenant due to deposit amount being more than 5 weeks worth money.

I wish to keep the same deposit amount for renewal as well.
please advise how can I proceed?

31

youcant take more than 5 weeks . Thats it. You can take more than a months rent in advance. Dont forget a guarrantor.

32

Thanks for your reply.
Do we have any option to ask for more than a month rent in advance via openrent? my renewal doesnt show any field / option for that.
and what will happen to the excess deposit once I propose renewal with 5 weeks deposit via open rent? Will it be credited back to tenant’s account?

33

you can ask for one month in advance or 2 or 3 or if you wish 4 or 5 or 6 up to you, its your place. You call the shots. I dont know if you can do thru Openrent I arrange all monies myself including rent collection , getting deposit and sending it off

34

Thanks for your kind repsonse