#AskTDS: “We are letting our property to four tenants – do they pay the deposit separately or together?”

AskTDS_10.01.2020

Tags: Depositjoint tenancyroom by room

This article has been written in response to a question we received from a landlord using the TDS service:

“We are letting our property to four tenants – do they pay the tenancy deposit separately or together?”

When you accept a tenancy where four people as tenants are joining to share the accommodation in a property, you will either prepare a joint assured shorthold tenancy agreement or a separate individual assured shorthold tenancy agreement possibly on a room by room basis.

If you are renting the property to the tenants as a group, then the tenants will sign a single tenancy AST agreement that requires them to be ‘jointly and severally’ linked as ‘the tenant’ so they can move in. 

In this instance, the tenancy deposit that is handed over and detailed in the tenancy agreement is to be associated with their obligations as detailed in the contract and would then also have deposit related clauses detailing under what circumstances a deduction may be required that can settled by the tenancy deposits sum. Even though in practice each may pay a share of this deposit, each named person as tenant would be equally liable for any rental arrears or damage, even if they didn’t personally cause the loss.

Alternatively, if you are renting out the property on a room by room basis each tenant will have their own separate tenancy agreement and have paid their own deposit for that piece of accommodation and under the terms as detailed in the contract. Each tenant’s liability will extend to their own private space such as their room and en-suite bathroom.  It may not necessarily cover communal areas such as hallways, communal kitchens or living areas; landlords should also be aware of any HMO licence requirements in the area where the property is situated. 

“How do I protect a deposit for joint tenants?”

TDS only can adjudicate over the distribution of the tenancy deposit. As the deposit money belongs to the tenant, we consider claims from the party wanting to make a deduction. If the tenant wishes to make dispute a counterclaim against the landlord, or wants to offset money they may owe the landlord due to condition of property (e.g. didn’t pay full rent due to lack of heating) they will need to consider taking their case to court as TDS will be unable to consider such claims.

About TDS:
Tenancy Deposit Scheme (TDS) is a government approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.
These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.