Once your tenants have agreed to go into your house and have passed all the referencing, it’s time to collect the money from your new tenants. This can be a substantial amount, but don’t be tempted to spend it! You are required to register the deposit with a Tenancy Deposit Protection scheme within 14 days of receipt. Once you’ve done that, don’t forget to inform your new tenants, in writing, that you have done this, as this too is a requirement.
This is a fairly new rule that has been in place since 2007 and there a few options available when it comes to choosing a Tenancy Deposit Protection scheme. Your tenants can check on the status of their deposit with these government-backed schemes at any time, so make sure everything is as it should be.
Due to the introduction of this rule, it unfortunately means you can’t use the deposit to do a bit of work on the property and then raise the cash at a later date, when it is needed. However, using one of these schemes does mean the money will be there when the tenants move on and prevents you from having to find the money from another source when the time comes.
Some of the schemes are free to use while others charge a fee. They can handle the repayment of the deposit back to the client once you approve the transaction, saving you the trouble of arranging the return of the money.
Just make sure the terms of the tenancy agreement are met, there’s no damage in the property and rent and bills are paid before the tenancy ends.
Deposits are very important to protect your tenants and yourself as a landlord. Make it a habit to stay within the rules.