A tenancy deposit is normally issued by a landlord once a suitable tenant is selected to live in their property, along with various fees, it is one of the most common fees a new tenant will have to pay. When we talk about a tenancy deposit, it is useful to look at it from both the tenant and the Landlord side to really understand the process and what it is for.
Tenancy agreement for tenants
This is a sum of money (no more than double the monthly rental can be charged) set aside as security against such things as damages (not wear and tear), cleaning, outstanding utility bills or rent arrears. As long as the rent and bills are paid in full and the property is returned in the same order as received (i.e.- no damages) the deposit should be returned in full.
The deposit must be lodged with a tenancy deposit scheme within 30 working day of the tenancy start date. The tenant will be advised which scheme is holding it following their move in and will receive a Form 42 letter confirming that the deposit has been lodged with an approved scheme.
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Tenancy agreement for landlords
A Landlord can request a deposit of up to two times the monthly rental which must be lodged with a tenancy deposit scheme to cover any damages, cleaning, rent arrears or unpaid rent/bills following a tenancy departure.
The landlord or agent must lodge the deposit with an approved deposit scheme within 30 working days of the tenancy start date. At the end of a tenancy a final inspection will be carried out which identifies if any deductions are to be made.
The Landlord then requests for the deposit to be released from the scheme, detailing the amounts to go to either party. More info can be found at https://www.mygov.scot/tenancy-deposits-landlords/