There is no standard form for this, it is the information that is prescribed, not any particular form. The prescribed information that must be provided to tenants is set out in the Housing (Tenancy Deposits) (Prescribed Information) Order 2007, in particular in section 2 (1).
In this post I want to look at just one of those items:
(g) (vi ) the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy;
This is perhaps the information which is most likely to be missed out by landlords and agents, many of whom just serve on the tenant the scheme leaflet (which sets out the details of the scheme rules) and the deposit certificate (which sets out the details of the parties names and contact details).
However, neither of these set out the information required in (g)(vi).
Let’s first consider though why this information is important.
The nature of a tenancy deposit.
Perhaps the most important underlying rule about a tenancy deposit is that it is the tenant’s money.
This means that under the general law, the landlord has no right to make any deductions from it. There is no ‘implied right’ to make deductions from the deposit – landlords are only able to do this with the tenant’s consent.
And how does the tenant give consent? By signing the tenancy agreement.
This is why it is so important that landlords HAVE a tenancy agreement. No tenancy agreement = no right to make deductions from the deposit. Which also = claims being chucked out by adjudicators, however horrendous the damage done by the tenants.
Why the tenancy agreement clause is important
The wording of the tenancy agreement clause is important because it sets out the deductions the landlord is entitled to take from the deposit.
So if the clause states that the landlord is entitled to deduct money from the deposit in respect of damage done to the property by the tenant – then that is ALL the landlord is entitled to deduct for.
He can’t, for example, make deductions for losses incurred in some other way – for example getting new keys cut if the tenant fails to return them. Or even for unpaid rent. He should have had a better clause in his tenancy agreement (which incidentally, most professionally drafted tenancy agreements will have).
So the wording of the clause is important. This then is the reason why we have (g)(vi). The tenant needs to know where in the tenancy agreement the relevant clause is so he can check what deductions the landlord is entitled to make from his deposit.
Dealing with (g)(vi) in your Prescribed Information
How then do you deal with (g)(vi) in your prescribed information notice? My view has always been that you need to actually state in your form, the number of the clause in your tenancy agreement which deals with this.
However, I have recently seen a prescribed information form which does not do this. The form is attached to the tenancy agreement and in one part states:
Deductions may be made from the Deposit according to the clauses within the Tenancy Agreement attached.
With another part stating
Deductions may be made from the Deposit according to terms set out in the Tenancy Agreement.
Let’s have another look at what (g)(vi) says
the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy;
Is this satisfied simply by stating that the tenant has to look at the terms of the tenancy agreement? Or does your prescribed information form actually have to state what the clause number is?
Compliance or non-compliance?
I can see why it is easier for landlords and agents to just use standard wording in their form. It saves them the bother of having to look at the tenancy agreement to check what the clause number is.
If the wording is valid, it also prevents errors if the wrong clause is put in the form by mistake.
I can also see that it sort of complies with the wording of (g)(vi), although not, in my view, with the spirit of the clause.
My view is that this sort of standard wording should not be sufficient to comply with (g)(vi). Tenancy agreements are long and complex. It may be hard for a tenant, unfamiliar with reading this type of document, to find the right clause. They need to be told exactly where it is.
Advice to landlords and agents
So my advice to landlords and agents is that the safest course of action is to give the actual clause number in your tenancy agreement – or at least give some general information as to where in the document it is. So your tenant can find it.
Otherwise (if I am right) you may find, in the middle of possession proceedings based on section 21, that your notice is found invalid due to non-compliance with the deposit rules, with your case being chucked out by the Judge, plus, if your tenant is legally represented, a costs order being made against you.
I may be wrong – but do you want to risk it?
NB If anyone has been involved in any claims for possession where this point was in issue, please post a comment below and let us know what view the Judge took and whether the possession order was made or not. Also – what do you put in YOUR prescribed information forms about this?