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Question

Deposits and Tenancy Deposit Schemes (England) | England | Start of a Tenancy (England)

Termination after deposit paid

5 Sep 2022 | 1 comment

Hi, lodger due to move in 5 days from now, contract signed and deposit paid. He’s give notice today that he won’t be moving in due to mental health issues and has asked for his deposit back.  It is now going to be very difficult to find  a new lodger quickly enough for this month’s rent to be paid.

I feel for him but where do we stand with returning the deposit?

Answer

1 Comment

  1. guildy

    The first thing to check is when the deposit was received. Was it before the contract was signed, and if so, was it one week’s rent? This is because the Tenant Fees Act applies to lodgers, so you must be sure that the correct procedure for holding a deposit has been followed. Please see here for details.

    However, once the contract has been signed, receiving a deposit for the contract is perfectly acceptable.

    Assuming the Tenant Fees Act has been complied with, in our view, as the contract has been signed, it will commence in five days, and the license fee becomes payable. We believe the deposit can be used against that license fee if they fail to pay.

    Once the contract starts, they can give notice under the contract (e.g. if it’s one of ours, it’s one month’s notice) and then the contract will end.

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