The Deposit Protection Service (DPS) has launched a calculator for letting agents to ensure they can comply with the security deposit cap once it is introduced.
From June 1, security deposits will be capped at five weeks’ rent where the annual rent is less than £50,000 and six weeks’ rent where the annual rent is £50,000 or more.
This will apply to all new tenancies as well as renewals.
The calculator will help agents using DPS to work out whether deposits on tenancies that started before June 1 will still comply once they are up for renewal after the cap is introduced.
Agents can enter the property details and rental amount, and work out the new deposit value based on the cap and whether any money needs to be returned to the tenant.
This also means landlords could refund excess amounts to tenants on existing tenancies before renewal if they wish.
The Tenancy Deposit Scheme launched a similar calculator last month that lets agents enter the monthly rent and calculate the maximum deposit they can charge.
Daren King, head of the DPS, said: “Our new calculator tool will help letting agents and landlords ensure they are ready when the new legislation comes into force on June 1.
“Our aim is to make meeting the terms of the new security deposit cap as quick and as easy as possible by offering a fully-managed service that allows letting agents and landlords to take care of any deposits that may be affected in one simple process.”
Comments (7)
What’s the penalty for non-compliance?
Not sure but likely to be draconian, landlords should be thankful that the death penalty has been abolished.
Up to £ 5 k on first occasion ( Per Breach ! )
Subsequent breaches, – up to £ 30 k or Criminal Prosecution.
Take reference fee off 4 Tenants and 6 weeks deposit = 8 Breaches i.e up to £ 40 K
If there are ambulance chasers out there, this is the first place to start!
To be fair to the Gov..the tenant fees legislation has no compensation risk unlike deposit compliance
Pretty sure in a few months time there will be claims against letting agents or landlords who didnt return the balance of deposit where over 5 weeks is held
Or claims against agents by landlords who have approved tenancies based on a deposit for a dog and 6 weeks rent, who find that they’ve got bills at the end of a tenancies and find that there’s not the money that they assumed there’d be for repairs.
As well as changing terms on the tenancy agreements, we’re summarily changing the terms of the landlords’ agreements with us.