Lodgers and deposits - when to give it back?

[Dollenganger333]

I’m just asking out of curiosity. My friend lets out one of the rooms in her house and takes a deposit from the tenant before they move in. Recently, her tenant had to move out within a week because she was made redundant. My friend was upset because the tenant got angry with her for still not having returned her deposit for a few days after she moved out. My friend seems to think that it would be normal for her to take a month to return it.

I think if it were me, I’d just return it straight away. She’s well off so no reason to hold onto it. And she’s prompting unnecessary confrontations.

Obviously a deposit from a lodger is different to one from a tenant lodged with a scheme but she should give it back as soon as she has ensured there is no damage etc

If the lodger has moved out, and friend is happy that the room is in the same condition as when the lodger moved in, why would she need to keep the deposit?

Just seems like rudeness/tardiness on her part. Lodger is already having a hard time being made redundant, why does your friend want to add to that stress? Not someone I'd want to rent a room from.

I think there is a disconnect with her, a lack of empathy and I did say to her 'she probably wonders why you are hanging on to it'. She has done this before and always ends up in tears when the person gets annoyed. I don't think she is deliberately mean but I do think that in her place, I'd return the deposit asap. The transaction is finished and they've moved out.

If she’s been made redundant she’s going to need that deposit. Tell your friend to give her head a wobble. She’ll soon enough get a replacement lodger.

No excuse to not give it back as soon as you have inspected the room.
I am sure with commercial rentals it will take longer but that doesn’t make it ok.

@Dollenganger333 I had three lodgers once ( not all at same time) and took two week’s rent as deposit- and gave it back when they left.
Why is your friend being tardy about giving their deposit back?

I don't know - it's so weird 🤷🏻‍♀️

The norm even with assured short hold tenancies is to give it back less any reasonable deductions as quickly as possible so your friend is the unreasonable one here. Especially in the circumstances

@Dollenganger333 And others: landlords don’t keep the deposits!!! They must be put into a deposit scheme and the details given to the tenant. Once it’s agreed there is no damage and deductions, the landlord agrees to release the full deposit. If there is damage they ask for deductions which can be challenged by the tenant. A landlord personally keeping a deposit is just wrong. So everyone needs to ensure a deposit is in a deposit scheme and is returned in full if appropriate. Not sure how long it takes but LL tells tenant they have agreed to its release. Cannot believe people are keeping deposits!!

The “norm” @CrotchetyQuaver is not to have it in the first place.

Should they be put into a scheme even when it's just renting a room in a house?

@Dollenganger333 Yes. If a person has paid a deposit the deposit must be protected. I use Tenancy Deposit Scheme. TDS. You pay the money in and set up an account. You release the money back to the tenant. It’s to protect the tenant. It makes no difference if it’s a room, a flat or a house. There’s a transaction between the LL and tenant and the money should be protected. It’s not great people think it doesn’t apply when they are taking money from tenants. One wonders if they have tenancy agreements or not bother with that as well.

That's incorrect @TizerorFizz . The rules about protecting deposits only apply to assured shorthold tenancies. A lodger does not have a tenancy.

https://www.citizensadvice.org.uk/housing/deposits/check-your-landlord-has-protected-your-deposit/

Your friend should pay the ex-lodger's deposit back asap @Dollenganger333 - there's no reason for her to hang on to it.

@PencilsInSpace We let out a room. It’s secured by a deposit that’s quite substantial. I think the best practice is to put it into a scheme. There is still money being exchanged and I think it protects the lodger/tenant’s money. So why wouldn’t you do it? Whether it’s 100% required doesn’t really matter for me. It’s doing the right thing and paying the money back through a protected scheme.

You said: If a person has paid a deposit the deposit must be protected.

Regardless of what you might choose to do, that is not correct.

TBH I can't see the point for a lodger's deposit because the schemes only provide dispute resolution for tenancy deposits so if you made deductions and the lodger disputed these, the scheme wouldn't do anything anyway.

You also said: One wonders if they have tenancy agreements or not bother with that as well.

Lodgers do not have tenancies, even if you ask them to sign a 'tenancy agreement'.

@PencilsInSpace Ok. I’m wrong. I would still do it though. Why would a LL not protect themselves and the lodger by using a separate account which is highly recommended by NRLA? It keeps the deposit separate in a named account for the tenant. It is wholly better to do that.

Absolutely no need to put a lodger's deposit in a tenancy deposit scheme - they don't have a tenancy, just a license to occupy. In fact, doing anything to suggest the lodger has a tenancy is a really bad idea.

The deposit should however be returned at the earliest opportunity, really as soon as the homeowner has inspected the room to make sure there is no damage and it has been returned in the same condition it was given (minus any fair wear and tear). A day or two at most - hanging onto a lodger's deposit for 30 days after they have vacated is incredibly unreasonable and I can understand why she is (quite rightly) getting pressure from the ex-lodger.

@TizerorFizz If you are protecting a lodger's deposit in a tenancy deposit scheme you are opening the door for a disgruntled lodger to assert they have a tenancy rather than a license to occupy. A tenancy is a completely different animal to a license to occupy and you almost certainly aren't offering a legally compliant tenancy so you are making yourself vulnerable in this regard. Tenants have significantly more rights and support in law than lodgers.

Good practice is to keep the lodger's deposit in a separate account that you don't use for anything else so the funds are ring-fenced as they legally belong to the lodger at all times unless you demonstrate a successful claim at the end of the license period.