Good faith deposit agreement form, Landlords frequently ask a new renter to pay one month’s rent beforehand and a deposit. The deposit is held by the landlord before the tenant leaves the home. When there is harm to the house or rent arrears the landlord uses the deposit to pay the costs. Many landlords fail to protect the deposit. There are two types of authorised deposit schemes available in the UK. They are custodial or insurance based schemes.
Custodial – this type of protection requires the landlord to pay the full amount of the deposit to a registered scheme. The cash is held in the scheme before the tenant leaves the property. Providing there are no disputes the deposit is paid back to the renter. Where there is a dispute the scheme uses an adjudicator to arbitrate between tenant and landlord. The adjudicator’s decision is normally final. Insurance – having an insurance policy type scheme the landlord keeps the full deposit. The landlord pays a fee for insurance to protect the deposit. The insurance must be taken with a government approved scheme. When the tenant leaves the property the landlord repays down the deposit to the renter. Insurance type schemes also have an adjudicator service if there is a dispute. When a dispute does arise the adjudicator will require the landlord to pay the entire deposit to the plot while the dispute is researched.
As landlord / tenant issues are among the most frequent legal questions I receive from friends, I’d like to discuss rights and responsibilities regarding security deposits within this informative article. At the end I will incorporate a sample letter you can send to a landlord for return of your deposit. Please note all information in this post is specific to California law. The laws of your state or authority may differ. Many states offer tenant’s handbooks that would include significant laws, or you need to contact a lawyer licensed in your jurisdiction for assistance.
Every time a property is renewed the insurance on the deposit must also be renewed for example when the landlord has a six monthly Assured Shorthold Tenancy and writes a new tenancy agreement in the end of the six months then the deposit must also be renewed. To save on expenses many landlords issue a tenancy for a fixed term period with a clause stating that the lien becomes a monthly contractual lien in the end of the fixed term. By having one tenancy for the length of the time a tenant is in the property that the landlord need only pay one fee to protect the deposit.