#AskTDS: “How can changes to the parties of a tenancy affect the deposit?”

#AskTDS: “How can changes to the parties of a tenancy affect the deposit?”

| 2 July 2018

This week, Alison MacDougall, Director of Dispute Operations at Tenancy Deposit Scheme (TDS Northern Ireland), answers an agent’s question: “How can changes to the parties of a tenancy affect the deposit?”

Circumstances can rapidly change during the lifespan of a tenancy, including the parties involved. It is important that the tenant change-over process is managed well to bring deposit liability for the outgoing tenant to an end.

There are some simple steps that landlords and agents can take to make sure the deposit remains properly protected and outgoing, incoming and remaining tenants are aware of their responsibilities at the end of the tenancy. 

Where there is a change in the parties to a tenancy, the best approach is to bring the existing tenancy agreement to an end, then deal with the deposit, and finally create a new tenancy with a new deposit.  Although this is the best approach, we appreciate that this option is not always achievable or practical.

How it works in practice for joint tenancies:
The landlord or agent repays any deposit amount due to the outgoing tenant (this amount may be £0.00), then the appropriate share of the deposit, detailed in the tenancy agreement, should be collected from the incoming tenant.

A new tenancy agreement may be drawn up, or an amendment may be made to the existing agreement to reflect the change in tenant.

Landlords and agents should ensure that the incoming tenant agrees in writing to be bound by the original inventory, making it clear that future deposit refunds will be based on this document.

For the old tenant, a waiver should be provided to clarify that they have received a refund of their share of the deposit and that they have no claim to the deposit under any new tenancy agreement.

If a new tenancy agreement has been entered into, the deposit registration for the old tenancy should be brought to an end.

The deposit for the new tenancy should be protected with a Government-approved deposit protection scheme, such as TDSNI within 28-days of receiving it.

You can read more about the process of ending a tenancy in our handy guide.

If a new tenant or multiple tenants are moving in to replace the outgoing, you can also add their details and ‘top up’ the protected deposit as part of the tenant changeover process.

The tenant changeover function should only be used if the parties are in agreement as to deductions being made from the deposit. As the tenancy is still on-going in these instances, the alternative dispute resolution cannot be used.

About the author:
Alison has been involved in dispute resolution for over 12 years, including senior positions at the Police Complaints Authority and the Office of the Independent Adjudicator for Higher Education. Alison joined TDS in 2007 as an adjudicator and is now responsible for the operational management of the dispute resolution team.

Alison MacDougall 2018 headshot

She has also been Managing Director of TDS Northern Ireland since 2017 when the scheme was first launched. Since then, she has guided it to being a market-leader and to multiple award wins.

About TDS:
Tenancy Deposit Scheme (TDS) Northern Ireland is a government-approved scheme for the protection of tenancy deposits.

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

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.