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If you are a landlord, you should realise how important it is to manage a tenant’s deposit in the correct manner. A failure to do can cost you a lot of money, even thousands of pounds, and this could have an enormous impact on your business. With many landlords struggling financially, very few would be able to manage a loss of this magnitude, so make sure you are aware of the five top mistakes with deposit that can cost landlords thousands of pounds.

Not protecting the full deposit
Not registering the deposit with an authorised scheme
Not protecting the deposit within 30 days of receipt
Failing to supply tenant with prescribed information within 30 days
Not updating contact details with the deposit protection scheme

Given the time constraints involved with some of these elements and the pressures that landlords face in their everyday business, it is not beyond the realms of possibilities for some landlords to forget or overlook these matters.

This is not an excuse or justification for failing to comply with clearly stated requirements, but it is a reminder that landlords can easily fail to comply if they don’t make the deposit a priority when dealing with a tenant.

Landlords need to provide a better service for tenants

Many people believe that regulations are imposed to minimise the impact of rogue landlords or irresponsible landlords. This is true for many regulations but as can be found with the regulations surrounding deposits, some landlords fall foul of the regulations even though they provide a relatively good service to tenants.

However, given the importance of financial peace of mind for tenants, the importance of dealing with the deposit in the correct manner cannot be stated enough. The need to reinforce the importance of deposit is part of the reason why some of the associated punishments can cost landlords thousands of pounds.

Be aware of the financial penalties associated with failing to comply with regulations

It is important for landlords to know that there are financial penalties for not complying with the above regulations. When a landlord fails to register the deposit or supply information within 30 days, they are liable to pay the tenant a sum of 1 to 3 times the deposit while returning the deposit to the tenant.

deposits rental

Given the cost of rent in London, a sum of the deposit and even 1 month of rent could reach into the thousands very quickly depending on the property location, size of property and condition of property. Even for a minor error, landlords may find themselves facing a large penalty which could place their property under severe financial pressure.

Landlords should also be aware that any Section 21 notice which is served during the period when a deposit is not properly registered is invalid. This may cause problems for the landlord, and this could see them penalised financially at some point.

If you are a landlord looking for guidance and support, contact me and I will be more than happy to help. I’m a property market specialist and I’ve assisted many landlords operate in an effective manner.