Lodger Security Deposits

Taking a deposit from your lodger isn’t “required”, but it is sensible, so you are protected against any rent arrears or damages.

How much deposit to take

The typical amount taken is one month’s worth of rent, but many also demand up to 6 weeks. But generally, most landlords ask for the former.

Most lodgers expect to pay a deposit, so it’s not usually a problem asking for one.

When to take the deposit

The deposit should be paid by your lodger upfront, before he/she moves in, along with the first months’ rent.

Do lodger landlords need to secure their lodger’s deposit?

The answer is no, but there’s a common misconception held by many that it needs to be.

Unlike when landlords in England & Wales take a deposit from a tenant, the deposit does not need to be secured into a tenancy deposit scheme as a legal requirement for a lodger landlord. As already covered in the what is a lodger post, someone who rents a room in your home cannot legally have an assured tenancy agreement, so they are almost always a lodger.

Over the recent years, many “tenants” have either threatened and/or successfully prosecuted their landlord for not securing the deposit into a deposit scheme, and this has got every landlord concerned. So just to confirm, if you have a lodger, and he/she tells you that you are breaking the law by not protecting the deposit he has paid, that is not true.

However, while you are not required to secure a lodger’s deposit, it is still important to keep the deposit safe.

Returning your lodger’s deposit

The best time to return the deposit is after your lodger has vacated the premises with all their possessions, and after you have checked their bedroom carefully for any damages or missing items. If you’re happy with returning the full amount then, you should then do so. Otherwise, discuss any deductions, and return the necessary amount.

It’s also a good idea to get a signed and dated receipt, confirming your lodger has received the deposit back, including the amount and any deductions.

As a security precaution, you should not allow your lodger to use the deposit as the final month’s rent, which is often a common request. By doing so, you may find it difficult to get any compensation in the event that you find any problems at the end of the lodger agreement.

Wear & Tear

Please note, landlords should NOT deduct any money from the deposit to repair any fair wear and tear issues. This can include issues like wearing carpets in the bedroom, or any other items that are naturally prone to wear, like most fabric and upholstery based furniture.