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Problems with illegal fees and deposits

This advice applies to Scotland

A security deposit is money paid to a landlord (or a letting agency acting on their behalf) as security against, for example, rent arrears, damage to property or removal of furniture.

If you're asked to pay a security deposit you should check the condition of the property and its contents carefully. When the tenancy ends, you may be held responsible for anything which is missing or damaged, and the landlord might claim all or some of your deposit.

You were charged illegal fees or premiums

Illegal premiums include charges for registering with the letting agency, charges for credit checks and administration fees. Any fees charged by the landlord to create or renew a tenancy agreement are also illegal. 

A private landlord or letting agency might ask for a deposit before you sign a tenancy agreement. It's sometimes called 'key money' or a 'holding deposit'. If the landlord doesn't refund this deposit at the start of the tenancy or if you decide not to take the tenancy it becomes an illegal fee, also known as a premium. If the landlord suggests turning it into a tenancy deposit then you might find that acceptable.

You can ask the landlord or letting agency to repay these fees up to 5 years after the tenancy has ended and if the landlord refuses you can ask the court to take action.

You haven't been given an inventory

If the accommodation is let furnished, the inventory is a list of the furniture and other contents which have been provided by the landlord. It's linked with the deposit - if there are damaged or missing items the landlord could take money from the deposit at the end of your tenancy. 

It's best for both you and the landlord that there's an inventory, since it reduces the likelihood of a dispute over whether there are missing or damaged items. 

The landlord or their letting agent normally draws up an inventory. It should list everything, with a good description of the items, including their age if antique or new, and their condition. You should check that you agree with the inventory before you sign and date it. It's good practice for the landlord to give you a copy. 

If the landlord doesn't draw up and agree an inventory, you can draw up one as soon as you get the keys to the accommodation, preferably before you move any of your belongings in. Take date-stamped photographs or videos to show the condition of furniture and appliances if you can. 

If you're visually impaired, you can ask your landlord to provide an inventory in a different format, for example on an audio tape or in Braille. Your landlord may be discriminating against you if they refuse to do this. More about disability discrimination.

The deposit seems too high

Under section 90(3) of the Rent (Scotland) Act 1984, a deposit must not be more than two months' rent. 

You shouldn't be charged other illegal fees or premiums

Your tenancy deposit hasn't been paid into a deposit scheme

Most private landlords are required by law to pay tenancy deposits into one of three tenancy deposit schemes. There are some exceptions, like if your landlord is a family member or you're a crofter. There's more information about unprotected deposits on the Shelter Scotland website

The three schemes are:

The landlord must tell you which scheme holds the money and how that scheme works. They have to do this within 30 days after the tenancy starts. If they haven't given you any information about where your deposit is protected, you should write to them to ask for this information. Shelter Scotland have letters on their website to help you do this.

If your landlord should have paid your deposit into a scheme but they haven't, you may be entitled to between 1 and 3 times the deposit amount. You need to take a complaint to the First-tier Tribunal about the landlord not complying with the protection rules. But you should consider how safe your tenancy is - some tenants (like private residential tenants) are better protected from eviction in retaliation, whereas others can be more easily evicted by their landlords. 

If you’re considering taking legal action you should consult an experienced adviser, for example at a Citizens Advice Bureau - where to get advice.

How to get your deposit back at the end of a tenancy

You should get it back if you’ve left the property in a good condition and with no rent arrears or unpaid bills. Your landlord cannot try to charge you for reasonable 'wear and tear' of any fixtures, fittings or furniture. 

If there's a clause in the tenancy agreement covering the deposit you might be able to challenge it because it's unfair, for example, a clause which doesn't allow for fair wear and tear.

If there's no inventory when you move in, your landlord could find it more difficult to keep part of your tenancy deposit to carry out repairs if they can't prove the condition the property was in when you moved in.

Most private tenants have to have their deposit paid into a deposit scheme. Most private tenants should have their deposit paid into a scheme but there are exceptions.

If your deposit is held by an approved tenancy deposit scheme

The three tenancy deposit schemes are:

You should have been told which scheme the landlord put your deposit into when your tenancy started. You may have created an account online. 

Contact the scheme that holds your deposit and ask for it to be repaid. If the landlord agrees to repay it in full, you'll be notified and it will be returned. It should be repaid in full automatically if the landlord doesn’t respond within a certain timeframe.

Your landlord may contact the scheme first, and may grant a release of the full deposit or they may propose to make deductions for damage. You can agree to this if you did cause the damage or you can challenge it. 

To challenge it you need to contact the scheme’s alternative dispute resolution (ADR) service. You can usually do this online. You’ll need to do this within a short time from when the landlord suggests making a deduction. The deposit scheme will have more information about the dispute process.

You should prepare evidence to dispute the landlord's claims about damage. You might want to argue that the damage isn't as bad as they claim, it was in that condition when you moved in or they're claiming more money than they should for a replacement. Photos from when you moved in and a copy of the inventory will help. 

An independent adjudicator will make a decision about how much deposit you should get back. You can ask for a review of this decision if you're not happy. 

There's more information about tenancy deposit schemes and using the dispute resolution service, on the Shelter Scotland website.

If your deposit isn’t in a deposit scheme

If you’re not sure whether or not your deposit is protected, you should first check your tenancy documents and then contact each of the schemes to ask whether they have a deposit under your name and address.

The three tenancy deposit schemes are:

If the deposit isn’t held in an approved tenancy deposit scheme, you can take civil legal action to get it back. The landlord could be ordered to pay compensation worth up to three times the amount of the deposit on top.

You can apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) for help if you want an order for payment where the landlord has not paid the deposit into an approved scheme. There is information on the First-tier Tribunal's website

If you’re considering taking legal action you should consult an experienced adviser, for example at a Citizens Advice Bureau - where to get advice.

There is more information about tenancy deposit schemes on the Shelter Scotland website.

 

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