Government clarifies deposit rules under the Renters’ Rights Act

Under the Renters’ Rights Act, many landlords have expressed concerns about how deposits will affect their ability to regain possession of their properties.

Property118 received Readers’ Questions and comments on deposits under the Renters’ Rights Act about a particular part of the government guidance, which says: “If your tenant paid you a deposit, a court will only give a possession order to evict them if you have put the deposit into a government-approved tenancy deposit scheme.

“A possession order will also only be given if you have returned the deposit to your tenant.”

We reached out to the Ministry of Housing, Communities and Local Government to help give landlords more clarification.

Government response below

A Ministry of Housing, Communities and Local Government spokesperson told Property118: “The Renters’ Rights Act will allow a court to award possession if the landlord has stored a tenancy deposit in a government-approved scheme (and complied with related legal requirements), or returned the deposit to the tenant, either in full or with deductions as agreed between the tenant and landlord.

“The court can also award possession if a separate, specific court process has been undertaken to determine whether the deposit was stored appropriately.

The Renters’ Rights Act does not change what will count as a valid deduction from a deposit, which includes unpaid rent and bills.

More specifically, a court will only be able to award possession if, at the time of a possession hearing:

• The landlord can demonstrate the deposit is being held in a government-approved deposit scheme, they complied with the relevant scheme requirements and they have provided the tenant with the legally required information about the deposit, as set out in existing tenancy deposit rules; or
• The tenancy deposit has been returned in full to the tenant; or
• The tenancy deposit has been returned with deductions, that were agreed between the landlord and tenant; or
• An application was made to the county court (under section 214(1) of the Housing Act 2004), for a determination on whether the landlord stored the deposit correctly in an approved scheme or complied with other related tenancy deposit requirements, and the case has been determined by the court, withdrawn or settled between the parties.

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