Landlords face tougher deposit protection rules

Share this Page
  • Facebook
  • Twitter
  • Google Plus
  • LinkedIn
  • Reddit
  • StumbleUpon
  • RSS
  • Email
  • Print

Landlords failing to protect a tenants buy to let deposit face tougher penalties under new laws that come in to force from April 6, 2012.

The government has closed holes in the tenancy deposit protection schemes after a number of high profile court cases slated the current rules as poorly drafted and impossible to police.

Many tenants found they could not claim a three times the deposit penalty from landlords who failed to lodge the money with one of three government approved schemes.

Now, the new laws passed under the Localism Act are better drafted and leave little leeway for landlords to avoid the rules.

Landlords now have up to 30 days to protect the deposit rather than the current 14 days, which removes any excuse of ‘administrative delay’ from a defence.

The tenant must be provided with a deposit protection certificate and an information leaflet about how the scheme works.

Now, the fine is at the court’s discretion, rather than a fixed three times the deposit. A magistrate or judge can set the fine at a minimum of the amount of the deposit or up to three the value.

The big difference for tenants is they can make a claim against a landlord who did not safeguard a deposit in an approved scheme for up to six years after they have moved on instead of 30 days under the old rules.

Landlords will cannot avoid a fine by lodging the deposit retrospectively – the offence is absolute, either the deposit was lodged within the 30 day limit or it was not.

The new rules apply to any assured shorthold tenancy starting from midnight on April 6, 2012.

Landlords with tenants who have already moved in with a deposit on protection do not have to take any action – but those with unprotected deposits must place them with one of the approved schemes by midnight May 30, 2012.

  • Facebook
  • Twitter
  • Google Plus
  • LinkedIn
  • Reddit
  • StumbleUpon
  • RSS
  • Email
  • Print

Comments

  • Anthonyaltman says:

    for gods sake dont listen to anybody who tells you you dont have to do anything for existing deposits the new legislation requires you to serve the prescribed  information on every tenant and anyone else who contributed to the deposit this includes student loan companies and student grants and credit card companies (but not debit card payments) theres a legal difference   each person must be sent 6 pages information for tenants 1 page key details of housing act 2004 2 sets of prescribed information 5 pages each set (can be downloaded from R L A website these should be signed by the relevent person one to be kept by them one to be returned to the landlord 2 copies of deposit certificate to be signed one to be kept one to be returned to the landlord 1 deposit declaration form to be signed and returned to landlord stating that no one else has contributed to the deposit or that someone else has contributed and giving there full name and contact details finally a letter giving clear  concise details of how to complete and sign the forms 21 pages for each person yes that really is 378 pages of documents for a 9 bed student house where all the parents have contributed how many of you have done that i bet you just served 7 pages on the lead tenant like the rest of us if you do not follow the law to the letter you will be spectacularly shafted by the law there will be no commonsense there will be no second chances  a penalty of three times the deposit plus the deposit i take a deposit of £1800.00 on a large house thats £7200.00 if i dont follow the law to the letter.  The usual suspects allready smell blood i have no doubt that rogue organizations (you know who i mean) are busy giving advice on how to catch out unsuspecting families who are landlords and dont know the new law dont be a victim of the feeding frenzy many families will be bankrupted make sure you are not one.   Remember the new law allows any person who contributed to the deposit to claim three times the deposit for 6 years after the tenancy has ended
    sweet dreams
    tony altman
    ps i did the figures if every landlord complies with this legislation they wiil have to print and send 534 million pages of documents in 2012


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon
  • Anthonyaltman says:

    forgot to mention the documents i quote as being needed all refer to deposits being protected by the my deposits scheme DPS and TDS schemes broadly similar but there are differences (see the excelent and helpfull RLA website for details)
    regards
    tony altman


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon
  • I a little confused first you mention ” Buy to Let” what relevance does that have?
    Also you say but those with unprotected deposits must place them with one of the approved schemes by midnight May 30, 2012. 
    Is this deposits collected since 6/4/12 or shall we say any time earlier, maybe since time began? 


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon
  • Don see my piece here http://www.property118.com/index.php/tenancy-deposit-protection-legislation-changes-at-midnight-on-5th-april-do-not-get-caught-out/25618/

    Any deposit taken since April 2007 must be protectected under the Housing Act 2004.  Any deposit taken since must be protected under the same legislation but also must comply with the changes made in the Localism Act 2012.

    Any deposit not protected by 5th May (30 days grace from 6th April changes) will be held outside of the law.


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon
  • James George says:

    Would this new legislation (6 April 2012) be “retrospective”? I.e. would it apply to a tenancy period which started and finished in (e.g.) 2011 but for which the deposit was never protected?


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon
  • James the Housing Act 2004 was the start of deposit protection legilsation and the Locallism Act 2012 has just tidied up some of the loose ends that have been used by landlords to fight cases where tenants deposits were not protected.  Any deposit taken after April 2007 must be protected otherwise tenants can take legal action even when the tenancy has ended.  Exactly how that would work for a tenancy that has been over for some time I cannot imagine, the landlord would need to trace the tenant and serve the protections certificate and prescibed information on him for a deposit that has beed dealt with long ago?  I can’t see that happening so those landlords who have held deposits that were not protected will have to hold their breaths and hope.  If the tenancy is still going we have been given an extra 30 days from 6th April to comply with the law.


    • Facebook
    • Twitter
    • Google Plus
    • LinkedIn
    • Reddit
    • StumbleUpon

×

Profile has been updated! Click here to view

×

Share with your friends?

Please share this article via one or more of the following social networks

×

Report this comment

  • Please enter a value between 7 and 7.
    Please complete the simple sum to prove you are a human
×

Please log in or

Join Property118 - It's FREE

or press Esc (top left of your keyboard) to close this message

×