Security deposit shake-up – bmd:law offer advice for landlords

Security deposit shake-up – bmd:law offer advice for landlords

Bernadette Mcdonald of bmd:law on what the changes mean for landlords.

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BMD:Law - Bernadette Mcdonald

Bernadette Mcdonald
director, bmd:law


QST: I have heard that the law is changing and landlords won’t be able to take deposits or bonds, is that true?

It’s true that there will be a draft bill published which will change the current system of landlords taking large security deposits and credit check fees. It will not prevent deposits altogether, merely limit them to a sum equivalent to one month’s rent. It will not be possible to take large payments as security and call it something else, such as first and last month’s rent.

QST: What about credit check fees?  

The aim of the new bill is to make it more affordable to rent in the private sector. One of the issues considered was that of upfront charges by lettings agencies such as credit check fees. It’s likely that any bill that goes through parliament will stop these fees being payable by the tenant; such expenses will fall upon the landlord themselves. Landlords will of course be able to negotiate with the agent to waive these fees, although over time this may be reflected in the monthly management fee charged by agents.

QST: How will landlords mitigate the risks?

Landlords can continue to obtain credit references although now they will bear the cost of this through their usual channels. More emphasis can be placed upon tenants providing evidence of payment of their existing landlord and references can be obtained from current landlords. Care will need to be taken however over simply relying on tenant obtained documentation and the validity of the paperwork will need to be checked carefully. Existing mitigation such as obtaining multiple months rent in advance will no longer be permitted. If a landlord feels that the tenant is at risk of non-payment or damage to the property, he/she may now simply opt not to let to that prospective tenant.

QST: Are there any other changes that landlords should be aware of?

Landlords should always make sure that they are up to date with all the changes in landlord and tenant regulation including deposit protection, right to rent and storage of tenant’s identity documents, repairs and changes to termination notices. When choosing a letting agent, landlords should check that the agents are up to date on training. Any breaches occasioned by an agent on behalf of the landlord may financially impact the landlord who will be liable to the tenant for the breaches. Tenants should also ensure that agents are knowledgeable so that they can be assured that they are being protected.

> Related | Security deposit cap: How will new legislation impact landlords and tenants?

For more information, advice or to arrange a consultation, call bmd law on 0151 722 8004 or email Visit for details.


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