Contracts and deposits
What is a deposit?
A deposit is a sum of money paid to the landlord, agent or owner of the property. The deposit is held to cover any damage that may have been caused during the tenancy or for any cleaning services required once the property has been vacated. It is normally equal to four to six weeks rent and is held in a tenancy deposit scheme until the end of the tenancy agreement. The landlord must say which deposit scheme your money is deposited in within 14 days of you handing the money to them. Remember to always ask for a receipt from the landlord.
Deposits should not be used to cover reasonable wear and tear caused during the tenancy, but are used to cover the cost of any damage caused or unpaid bills during your tenancy. It is a good idea to take photographs of the accommodation when you move in, particularly of any damages or faults, in case the landlord queries it when you move out. The landlord should return the deposit within four weeks of the end of the tenancy and state the reasons for any deductions. You may also be expected to provide evidence that all utilities bills have been paid.
What is a retainer?
Some landlords have different interpretations of a retainer. Most commonly, a retainer is a non-refundable sum of money, calculated as a percentage of the rent, paid by a prospective tenant to a landlord to hold a property for them over the summer months leading up to the start of the academic year. Retainers are not always required and are usually negotiable with your landlord.
What is a guarantor?
Some private sector landlords will ask for a guarantor. This is typically a parent or a family member who in the event of a tenant being unable to meet their financial obligations agrees to meet them on their behalf. These obligations could be overdue rent or damage to a property. A guarantor will be asked to sign a guarantor agreement by the landlord or agent.
It is important that where there is a joint tenancy the guarantor ensures that they are only acting as guarantor for their own son or daughter and not the rest of the group.
What is a contract?
A contract is a legally binding document between you (and possibly your housemates) and your landlord. It sets out the terms and conditions that you must abide by throughout the tenancy. It should contain information such as the:
- address of the property
- address of the landlord
- start and end dates of the tenancy
- agreed rental amount.
Please read the contract carefully before signing it. The landlord should allow you 24 hours to read through and check the contract and should not pressurise you into signing the contract on the spot. It is advisable to have your contract checked by the Student Advice Centre within the Students' Union before you sign it or hand over any money.
Please find below some common types of contracts.
Joint contracts (joint liability)
If a group collectively signs one tenancy agreement, then you are likely to be termed joint tenants. This means you are 'jointly and severally' liable for rent and deposits. Therefore, if one or more joint tenant(s) can't or won't pay the rent - one or all of the others may be legally liable to pay the outstanding amount. Equally, if one person damages something in the property, others may lose some of their deposits to cover the costs. We would recommend that students ask their landlord to provide them with individual contracts.
Individual contracts (individual liability)
If you sign an individual contract you have an individual agreement between yourself and the landlord. You are only liable for your agreed rent and cannot be charged if any of your housemates don't pay their rent or leave before the end of the contract. You will be liable for any damage to your room and communal damage if the person responsible does not accept responsibility.
Fixed time contracts
Signing a contract for a fixed period means that you must adhere to the terms and conditions and pay rent for the entire duration of the agreement. You are required to pay rent even when you are not staying in the property. For example, during the Christmas or Easter breaks. Some landlords make special arrangements to reduce rent over the summer, but they are not legally obliged to. Make sure any arrangements you make are confirmed in writing.
If you choose to move out during the tenancy period, you will probably still be liable for rent.
Occasionally, the contract contains a break clause that enables you to hand in your notice before the tenancy has ended. However, this is rare. If you wish to move out, and your tenancy does not contain a break clause, then you will probably have to try and negotiate a new agreement with your landlord. Often the landlord will allow you to leave, if you can find someone to replace you. If an agreement is not reached, and you decide to move out anyway, then the landlord may take court action to retrieve the unpaid rent for the remainder of the tenancy.