Tenant's deposit

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    Tenant's deposit

    Good afternoon,
    I am selling my property with a sitting tenant and have a question with regards to the deposit paid by the tenant. It is with the Deposit Protection Service and the buyer of my property wants to deduct the amount of the deposit from the payment for the property or have asked if it can be handed over. Is this possible?

    Am I going to have to get the deposit returned to the tenant and then get the buyer to collect the deposit from the tenant? Or is there an easier way?

    Many thanks for all your help in advance

    M

    #2
    Why not ask the DPS how you should deal with the assignment of the deposit from you to the purchaser?

    I would be reluctant to deduct the value of the protected deposit from the purchase price because (legally) you will not be the landlord when it comes to its return (or retention) and will therefore have no rights in it.

    Also, does this even make sense? The deposit is T's property until you make a lawful deduction and not yours.

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      #3
      You do not have to pay the deposit to the buyer, or refund the deposit to the tenant.

      The DPS is a custodial scheme, therefore the deposit money is physically held by the scheme. All that needs to happen is for the landlord's details to be amended with the scheme.

      See paragraph 16 of DPS' T&C. Link here.

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        #4
        The buyer has to open a free account with DPS and you can then do a transfer between your account and his.

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