Student let deposit protection

Landlord Discussion Legal
1

I am an experienced landlord, but have little knowledge of student lets and my son has just sent me his contract through to review before he signs.

The tenancy agreement says:
“The Retainer is due immediately upon the signing of this Agreement and is held as a non-refundable Retainer until the commencement of the term when it is held as the Deposit.
The Deposit will be protected under a government authorised scheme and details will be provided to the Tenants, not later than 30 days after the commencement of the term”

So, the contract is saying that the deposit will be secured within 30 days of 1 July, when the contract starts.
They have also paid a holding deposit of a weeks rent to be deducted from the first rent payment, separate to the ‘retainer’.

My question is: Is that legal? Under the tenant fees act, I cannot see that there is a provision for such a thing as a ‘retainer’ and deposits have to be secured within 30 days of receipt by the landlord, so surely the ‘retainer’ is a deposit which must be secured within 30 days of receipt?

Also, they want to charge £125 +£10 per tenant if there is change of tenant, which is rather more than the £50 suggested by the tenant fees act - would that class as a ‘reasonably incurred cost’ since it is just a figure made up by the letting agent as to what they want to charge.

(The property is in England btw)

2

No, its a breach of the Tenant Fees Act 2019 and of Chapter 4 of the Housing Act 2004, (deposit legislation). However, its the landlord that is most at risk from this as the students could later claim a penalty for non-protection of the “retainer” within 30 days of receipt.

With regard to the fee for a change of tenant, I don’t think there is binding case law, but there is a case from a very senior circuit judge that would be almost certainly be referenced in any future case. I think its likely that in this case the £50 limit may apply.

1 Like
3

That what I was thinking - the agent is putting the landlord at risk with bad advice. I thought I might message the landlord and warn them (as a landlord myself!) … Or wait and advise my son and his friends to put in a claim of 3x the deposit when they move out if they are late securing the deposit! :joy:

4

Its certainly a potential bargaining chip.