- The maximum deposit that can be taken is 5 weeks rent unless
- The annual rent is £50,000 or more when 6 weeks rent can be taken
If any more than this is taken it will be a ‘prohibited payment’. This means:
- You (if you are the landlord or letting agent) will be committing a civil offence and can be prosecuted with a fine of up to £5,000
- The Council can as an alternative impose a financial penalty charge of up to £30,000
- You will not be able to use section 21 until the prohibited payment has been refunded to the tenant ( or licensee if the payment was made by licensees)
- The additional payment can be recovered by tenants / licensees applying to the First Tier Tribunal
It is important when taking a deposit that you work it out correctly as if the payment is just £0.01 over the permitted amount you will, strictly speaking, be subject to penalties. So you need to be careful.
To help we have created a convenient online calculator for you which you can see below.
The second attempt!
This is actually the second version of our calculator as the first one had somewhere in its DNA a tendency to round up. So we employed a programmer whose brief was to create a new version which would NEVER round the numbers up!
This is the version we have online now – so you should be safe using it. It will also be useful for working out the weekly rent which you can use when taking a holding deposit.
Useful for tenants too!
If you are a tenant you can use it to check that your landlords or their agents have charged the correct amount. If they have charged too much – you cannot be evicted under section 21 until they have refunded the difference to you.
You can get to our calculator (on this website) at any time by clicking the banner in the sidebar on most posts. You will also find it on www.landlordlawessentials.co.uk where you can read more about our free content service. This calculator is the first.
Use it on YOUR website
If you copy the code found via a link at the bottom of the calculator you can publish the calculator on your own website (in the same way as you can with YouTube videos). Where
- It will help your readers, and
- Help your staff (for example for your online staff manual)
It will work anywhere that is connected to the internet.