Inventories & Deposits

Why are Inventories Important?

It is important that landlords who choose either to take a deposit or use a guarantor, draw up a detailed Inventory/Schedule of Condition (see below under Documents to download) and make sure it is signed by both landlord and tenant at the start of the tenancy. If the property is not returned in good condition (allow for fair wear and tear) it is the Landlord's responsibility, NOT THE TENANT'S to provide proof. If a detailed, signed Inventory/Schedule of condition is part of the tenancy agreement at the beginning of the tenancy, a dispute regarding deposit deduction is also less likely to occur at the end of the tenancy.

Some landlords ask tenants for a Retainer/Holding deposit (click on the form below to provide your tenant with a receipt) whilst credit/reference checks are being carried out before the tenancy commences.  This should not be confused with the deposit that is taken as part of the Assured Shorthold Tenancy Agreement. If the tenancy goes ahead the Retainer/Holding deposit can be put towards the main deposit amount. If the tenancy does not go ahead,  or an AST Deposit is not taken, the Retainer/Holding Deposit can be returned or witheld depending on the reasons why the tenancy does not proceed.

A tenant is less likely to dispute any deposit deductions if all items and associated costs are clearly itemised (click on the deposit return analysis form).

Tenancy Deposit Legislation

Since 6 April 2007, tenants' deposits have been regulated. From that date landlords taking tenancy deposits with an Assured Shorthold Tenancy Agreement, must protect those deposits by using a Tenancy Deposit Scheme. They must also make the scheme information available to tenants in a prescribed form within 14 days of taking a deposit.

This applies to all Assured Shorthold Tenancies set up after 6th April 2007.  Deposits that have been taken for tenancies set up before 6th April 2007 do not need to be registered with a scheme unless a new tenancy agreement is issued after that date. Deposits taken with other types of agreement ie Resident Landlord, Common Law, Company Let, do have have to be protected. For complete details on all the Options available, including not taking a deposit, see below Guidance Notes: Tenancy Deposit Options.

Tenants' Prescribed Information

When landlords place a deposit with a tenancy deposit scheme, they must provide tenants with information of that scheme in prescribed form from two sources. 1) NFRL Prescribed Information sheet (see the documents under DOCUMENTS TO DOWNLOAD below)  2) The Terms and Conditions of each scheme and the leaflet for tenants available from the scheme website.

• Custodial Scheme (The DPS) (government run and free to use) terms and conditions and tenants leaflet: www.depositprotection.com/Public/Schemes.aspx and www.direct.gov.uk/tenancydeposit.
• Insurance based scheme (TDSL) (members receive NFRL discount) terms and conditions and tenants leaflet: www.mydeposits.co.uk 
• Insurance based scheme (TDS) (most likely to be used by agents and landlord with larger portfolios) terms and conditions and tenants leaflet: www.tds.gb.com   

PLEASE NOTE: Landlords using the TDSL insurance based scheme should be aware that they (Landlords) are now responsible for providing proof to tenants that deposits have been protected. From 1st September 2007 TDSL will no longer send a copy of the Deposit Protection Certificate to Tenants.Landlords/agents should either download an extra copy of the TDSL Deposit Protection Certificate if protecting the deposit online, or make an extra copy of the Certificate that is supplied by TDSL by post if the deposit is protected over the telephone. Tenants should sign a copy of the Certifice to certify that they have received it.

IMPORTANT NOTE - When landlords instruct agents to register the deposit
Landlords who instruct agents to take a deposit from tenants and register it with a scheme, must ensure that they receive a copy of the written proof from the scheme provider that this has actually taken place (usually in the form of a certificate).  If the agent has placed the deposit in a scheme that requires a fee to register, that agent must be bonded ie be registered with the Association of Residential Letting Agents (ARLA) www.arla.co.uk. This means that the agent's client account (in which landlords' deposits are held) is insured against the failure of the agent's company. Landlords are ultimately responsible for repayment of the deposit to the tenant and for ensuring that the tenant is provided with the terms and conditions of the Tenancy Deposit Scheme used. 

DOCUMENTS TO DOWNLOAD

Guidance Notes: Taking a Deposit and Compiling and Inventory/Schedule of Condition. (This document includes: Guidance on compiling and inventory including how to calculate fair wear and tear, Inventory/Schedule of condition Template, Deposit Return Form Template, Sample Completed Deposit Return form, Sample Deposit Return letter)

Form: Retainer/Holding Deposit Receipt

Form: Deposit Return Analysis

Form: Inventory/Schedule of Condition Template

Guidance Notes: Tenancy Deposit Options

Information Sheet - Tenants' prescribed TDS Information - Custodial (The DPS)

Information Sheet -Tenants' prescribed TDS Information - Insurance (TDSL)