I’m a housing expert – thousands of renters could be owed compensation over ‘risky’ deposits
A SIMPLE check could see thousands of renters claim compensation back from their landlords because of “risky” deposits.
Landlords often require you to put down a deposit if you’re looking to rent a house - it can be hundreds or even thousands of pounds.
This can be difficult to save up for - particularly if you're currently renting elsewhere and so already have money tied up in a deposit.
A crackdown on overly-large deposits was rolled out in 2019 - under new rules, tenants can be charged a maximum of five weeks’ rent as a deposit.
This increases to six weeks if your annual rent is £50,000 or more.
There are also rules when it comes to how your deposit should be kept safe - and if landlords flout these rules, you could be owed compensation.
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If your landlord doesn't store your deposit correctly, you could claim thousands of pounds in back.
Paul Hampson, housing expert at CEL Solicitors, said: “Renters up and down the country could be missing out on money they are entitled to if their deposit was incorrectly held."
He’s spent 20 years advising renters on their rights and winning them back money they are due.
He explains how you can check if you’re eligible for a pay out over your deposit.
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What are “risky” deposits?
Landlords legally have to store your deposit money in one of three government-backed tenancy deposit schemes.
These are: the Deposit Protection Service, MyDeposits and Tenancy Deposit Scheme.
“Your landlord must put your money into one of these three schemes within 30 days of receiving the payment - this is a legal requirement and is designed to protect your money,” Paul said.
These schemes keep your cash safe - it means the deposit is still your money, and not the landlord’s.
Your landlord should provide information about which scheme they use.
And if your cash isn't put into one of them - you could be entitled to compensation of up to three times your deposit amount.
That could mean a hefty pay out given that the average deposit renters put down last year was £1,054, according to the Office for National Statistics.
It could mean you're due compensation of up to£3,162 - and you'll get your initial deposit back on top too.
You can even put in a claim AFTER you've moved out of the property if you find out your deposit wasn't correctly stored, Paul said.
How can I claim cash back?
To claim, you must be able to prove that you paid the deposit in the first place.
That means you’ll need a bank statement or receipt as evidence.
You will need to apply for a rent repayment order through a tribunal - either you or your council can apply for this.
There may be fees involved but housing charity Shelter said these can be claimed back if you are successful.
If the court rules in your favour, your landlord will have to pay you compensation within 14 days.
You can also contact non-profit body who can help you out with your claim.
A spokesperson for National Residential Landlords Association said that over £4billion is protected in official deposit schemes, claiming that the "vast majority" of landlords stick to the rules.
The spokesperson said: "The schemes ensure the money is safeguarded and provides free and independent adjudication if there is a dispute over any deductions, which only happens in around two per cent of cases."
Other ways you can claim compensation from your landlord
You can claim cash back from your landlord in certain cases.
Repair works
Your landlord is responsible for most of the repairs that need to be carried out on your home - that includes heating, pumbing and gas pipe issues, as well as electrics.
You may be entitled to compensation from your landlord if they fail to carry out repair work within a reasonable time, or if your house is unfit to live in due to poor conditions.
This may be in the form of a rent reduction or payout. Write to your landlord in the first instance, and if they don't agree, renters can take legal action to claim compensation either during the tenancy or after it ends.
Mould and damp
Renters in England and Wales can take their landlords to court over problems including cold and damp homes.
The Homes (Fitness for Human Habitation) Act came into force in 2019 and amends the Landlord and Tenant Act 1985.
It means landlords must make sure their properties meet certain standards at the beginning and throughout a tenancy.
Deposit refund
Tenants are now better protected and can't be asked to put down excessive amounts of money as a deposit.
The new rules were first introduced in 2019 capping the amount that landlords and lettings agents can ask for to secure a property.
The maximum they can ask for is five weeks' rent on properties where annual rent is less than £50,000, and six weeks' if it's over that.
Anyone who has renewed a tenancy since then could be owed cash.
That's because all deposits must be capped - even if the deposit was originally put down before the rules changed.
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In the first few months of the new laws the Tenancy Deposit Scheme made 2,550 repayments totalling £817,031.33.
The average amount paid back was £320 but the highest amount one tenant got was over £3,000.