#AskTDS: “If one tenant wants to move out, what happens to the shared tenancy deposit?”

In this week’s #AskTDS, we answer a common question we receive from our landlord and tenant customers: “if one of the named tenants decides to move out of the home what happens to the tenancy deposit that was paid?”

Friends, family and a shared group can, as tenants, often have a change in circumstance that may mean that one person may decide that they want to move out of a shared home. This is quite common and can happen for lots of reasons; perhaps the housemates have fallen out or a new job offer means one person needs to move on. Whatever the reason, in most cases the landlord may be asked to consider allowing a change to the tenancy agreement as signed.

It sounds a simple and reasonable request, but the parties need to consider the terms of the tenancy agreement first to ensure they get it right.

Best practice guidelines for changing a tenant

Firstly, the tenancy is an agreement (contract) between the tenants, who are jointly and severally responsible for the obligations under the agreement, and the landlord. The tenancy deposit is paid by the tenants for clauses as detailed in the tenancy agreement.

A landlord may allow a change, and may consider allowing the changing of the names of the responsible tenants and manage the outgoing tenant to be released from their obligations; and accept an incoming tenant to take on the responsibilities of the tenancy. However, the tenancy deposit will remain in place for the obligations and would be register already for protection.

The outgoing tenant could arrange to collect the equivalent share of the deposit from the incoming tenant but that is a matter between the tenants.

The parties need to be protected and the requirements of the Tenant Fees Act 2019 may have an impact on landlords considering a change to the agreement. TDS would recommend the best method for changing tenants is to consider bringing the tenancy to an end and starting the process with a fresh agreement, this will allow the landlord to inspect the property and decide if they will return the deposit in full or if there are claims to be made.

The new tenant, and the tenants who are staying, would then sign a new agreement and the deposit would be registered for protection for the new term. Its important that the deposit is re-protected and not just edited as this could leave the landlord open to a claim from the leaving tenant.

For tenants using TDS Insured, we have created a guide on changing sharers mid-tenancy. This will provide more detail and a step-by-step guide to changing sharers mid-tenancy.

In TDS Custodial, we have a unique feature which allows you to perform a ‘tenant switch’ without having to repay the full amount and then re-protect the deposit.

Switching tenants in an on-going tenancy can bring about potholes for landlords. Tenants hoping to switch should therefore be prepared to sign a new tenancy agreement and go through the process of having their deposit protected again. New inventories or check-in/out reports may also be needed.

For more tenant tips, please view our tenant FAQ page.

For more landlord tips, please view our landlord FAQ page.

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 Northern Ireland: TDS is Northern Ireland's leading and only not for profit tenancy deposit protection scheme.

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.

ARLA|Propertymark: For agents who would like to stay up to date, you can contact Propertymark | ARLA at: join@propertymark.com. By being a member of Propertymark | ARLA you will be eligible for TDS Insured best headline rates.

RLA: If you are a landlord and would like to keep up to date with any changes that may affect you or your responsibilities, you can contact the RLA at: info@rla.org.uk and quote reference: dg715 to receive 25% off your first year's membership.


Posted by TDS on 1 August 2019

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