Will students who pay deposits be subject to tenancy deposit
schemes?
It depends. Where student accommodation is let under an AST, the
deposit must be safeguarded in an authorised scheme.
Rooms in halls of residence are not let on ASTs if they are
controlled by the university. However, some universities lease
their halls of residence to private companies. These companies may
let the accommodation on an AST.
What happens where a third party pays the deposit on a
student's behalf?
In some instances, local authorities, voluntary bodies or other
third parties will pay the deposit directly to the landlord on the
tenant's behalf. The tenant and third party will need to
confirm who is to receive the deposit when it is
repaid.
How is the deposit repaid when an overseas student
returns home?
Schemes are able to return deposits into foreign bank accounts.
There may be a charge for this that would need to be paid by the
tenant.
A full deposit has been taken on or after 6 April 2007 (eg
1 May 2007) for an AST which started after 6 April 2007 (eg in
September 2007). Will the deposit need to be protected under an
authorised scheme and, if so, at what point?
Yes. If a deposit has been taken on or after 6 April 2007, for a
property which the tenant will take up occupation in September
2007, the landlord will be required to protect the deposit in an
authorised Scheme within 14 days of receipt (in this example, by 15
May 2007). With effect from 2nd April 2012, the time period
increases to 30 days.
Is a holding deposit (ie a deposit that is taken before the
landlord and tenant have entered into an agreement in respect of a
tenancy of a specific property) that has been taken on or after 6
April 2007, a tenancy deposit that has to be protected in a
scheme?
No. A holding deposit taken in these circumstances is not a
tenancy deposit for the purposes of section 212 of the Housing Act
2004 and will not be required to be held under an authorised
Scheme. A deposit is only required to be placed in a scheme if it
is money held which is paid as security for the performance of any
obligations of the tenant or the discharge of any liability of his,
arising under or in connection with the tenancy. So if the tenancy
agreement has not been entered into, or there are no contractual
obligations resting on the tenant when he pays the holding deposit,
then the deposit paid is not a deposit for the purposes of the Act.
However, if a landlord is holding a holding deposit in respect of a
person who subsequently becomes his tenant, then the landlord must
either return the holding deposit to the tenant (so that the tenant
can give it to him again as a tenancy deposit) or retain it, and
protect it in a scheme within 14 days (30 days with effect from 2nd
April 2012) of the tenant agreeing to enter into a tenancy (ie from
the date that the holding deposit becomes a tenancy
deposit).