Deposits
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      Guide: Deposits and Release of Deposits for Non-Housing Act Tenancies

      This guide explains how PropertyLoop handles deposits as a stakeholder for non-Housing Act tenancies, including company-led agreements, commercial leases, and other arrangements where landlords are not required to register deposits with a government-approved deposit scheme. Property Loop ensures a fair and transparent process while adhering to the guidelines followed by government schemes for holding and releasing deposits.

      Key Principles

      1. Stakeholder Role: Property Loop acts as a neutral stakeholder, holding the deposit in our client money account, which is safe, insured, and regulated.
      2. Fair Treatment: The deposit is treated with fairness to both the landlord and tenant, in line with the rules and guidelines used by government deposit schemes.
      3. Non-Housing Act Tenancies: These agreements are not governed by the Housing Act, so landlords are not obligated to register the deposit with a government scheme. However, PropertyLoop provides an equivalent level of security and impartiality.

      Deposit Handling Process

      1. Receipt of Deposit

      • Upon signing the tenancy agreement, the deposit is collected and held securely in PropertyLoop’s client money account.
      • Confirmation of deposit receipt is sent to both landlord and tenant.

      2. Holding the Deposit

      • The deposit will remain in PropertyLoop’s client money account until an agreement is made between both parties regarding its release.
      • PropertyLoop acts impartially as a stakeholder to ensure neither party can unilaterally access the deposit.

      3. Release of Deposit

      • Agreement by Both Parties:
        • If both the landlord and tenant agree on the allocation of the deposit (e.g., deductions for damages, unpaid rent, or a full refund), Property Loop will release the agreed amounts to the respective parties within 14 days of receiving the agreement.
        • Written confirmation from both parties is required.
      • Disputed Deposits:
        • If there is a disagreement over how the deposit should be allocated, the disputed amount will remain held by PropertyLoop until an external resolution is reached.
        • PropertyLoop cannot provide an adjudication service for non-Housing Act tenancies, so disputes must be resolved through mutual agreement, mediation, or the small claims court.

      4. Dispute Escalation

      • If an agreement cannot be reached:
        • Court Decision: Either party may escalate the matter to the small claims court or another agreed dispute resolution process.
        • Property Loop will retain the disputed funds in the client money account until a court decision or mutually agreed resolution is provided in writing.
      • Partial Agreements: If an agreement is reached on part of the deposit, Property Loop will release the agreed amount and hold the remaining disputed balance until further resolution.

      Key Points for Landlords and Tenants

      • Security: The deposit is held in an insured, regulated client money account, ensuring its safety.
      • Fairness: Property Loop operates impartially as a stakeholder, following the same principles as government deposit schemes.
      • Timely Release: Agreed funds are released within 14 days of both parties’ written consent.
      • Dispute Resolution: In the absence of an agreement, the courts provide a final decision on disputed deposits.

      Example Scenarios

      1. Agreement on Deposit Deductions

        • Tenant agrees to £500 in deductions for property damages, and the landlord agrees to return £1,000 to the tenant.
        • Both parties provide written agreement, and Property Loop releases the agreed amounts within 14 days.

      2. Dispute Over Entire Deposit

        • The landlord claims £2,000 for damages, and the tenant disputes the claim.
        • Property Loop holds the full deposit in the client money account until the matter is resolved via the small claims court or mediation.

      3. Partial Agreement

        • Landlord and tenant agree on a £1,000 deduction but dispute £500.
        • Property Loop releases the agreed £1,000 within 14 days and holds the remaining £500 until further resolution.

      Conclusion

      PropertyLoop’s deposit handling process for non-Housing Act tenancies provides security, fairness, and transparency. By acting as a stakeholder, we ensure deposits are held safely, disputes are managed impartially, and funds are released only when both parties agree or a legal resolution is reached.