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New Deposit Law For Existing Tenants

My tenants started living at my property from 1st Dec 2018. The monthly rent is £1100. I took £1500 for the deposit then. With the new deposit law (5 weeks deposit) coming on 1st June 2019, do I need to return back the extra money to my tenants. I dont mind returning it. I would like to know if the new law will be applicable for the new tenants only or will it be for the existing tenancy as well please?

Thanks

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Thanks for raising this, I have the same question. Anyone ?

Hey Lara and @Tajinder, Sorry to have missed this!

Common question I’m hearing from a few landlords.

You don’t need to return the extra deposit until either:

  • 1st June 2020, or
  • you renew you existing tenancy

You can use this calculator to easily find your maximum deposit and holding deposits.

Hope that clears it up, do let me know!
Sam

Hi do you return part of a deposit from a dps?

Hi,

You need to release the deposit on DPS. Part to you and part to the tenant. Then re register the returned amount to you.

Inform the tenant to accept the part deposit to speed up the process.

After you have re registered the deposit, you can send then the prescribed information which you can get online through DPS.

Also don’t forget to note the new deposit amount on the renewal agreement.

Hope this makes sense.

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5 weeks rule is for both new and existing tenancy.

Hi Sheetal, the new rules apply to new tenancies from 1st June 2019.

They apply to existing tenancies from 1st June 2020.

Sam

Hi Tajinder - the following is copied from the DPS website and it is clear that surplus deposit monies do not have to be returned unless you are entering a ‘new fixed term’ with your current tenants. If the tenancy agreement will become a rolling agreement i.e. will end with the appropriate amount of notice being given by either the tenant or the landlord, then you do not have to return any deposit. DPS Quote follows:

*The cap applies to all new/renewed tenancies including shorthold/student

These changes will apply to ALL new tenancies entered into from 1 June 2019 , and any existing tenancies that are renewed on a fixed-term basis. It doesn’t affect any tenancies signed before 1 June 2019 (irrespective of when the tenant actually moves into the property), although the change will apply to any future fixed-term renewals. :

You’re not required to re-serve Prescribed Information

There are no special provisions or exemptions if the tenant has a pet. The maximum deposit amount allowed must still fall within the compliance thresholds above.

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Thank you for pointing this out to me. I was given difference advice.

Sheetal

Hi,

I’ve had both options re surplus deposits quoted as correct. The best advice I can get seems to be, “You probably don’t need to return the excess but a Section 21 court might find otherwise, so probably best just to do it anyway.” What is illegal after June 2020 is to request additional payments. The moot point is whether a surplus deposit that has already been paid pre 1/6/2019 is a request for an additional payment. Apparently a court could find that it is. I plan to watch this space and in the meantime keep the surplus deposit, referring tenants to the MyDeposits guide if they query it.

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