Do I need to re-protect my deposits?

by Readers Question

16:46 PM, 18th December 2012
About 7 years ago

Do I need to re-protect my deposits?

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Do I need to re-protect my deposits?

Do I need to re-protect my deposits?

I have been told that I need to issue another Deposit Protection Certificate when my fixed term Assured Shorthold Tenancy agreement “AST” reverts to a Statutory Periodic Tenancy “SPT”. Is this correct and if so, do I need to pay to re-protect the deposit with the insurance backed schemes such as My Deposits, The Dispute Service “TDS” and Deposit Guard?

I have also heard that the Deposit Protection Service “DPS” service need to be informed when a tenancy reverts to a Statutory Periodic.

I have looked at all of the deposit protection scheme websites to try to find the answer for myself and if anything I’m even more confused than when I first started looking into this.

Please put this question to you panel of experts at Property118 as I am very worried that if this is right, along with no doubt most other landlords I am breaking the law and potentially liable to pay 3 times the deposit back to all of my tenants whose tenancies have rolled over onto SPT’s since 5th April 2012. In my case this would amount to liabilities which would probably bankrupt me and given that the law is that all deposits needed to be protected within 30 days post 5th April 2012 there’s not a thing I can do about it.

I am a landlord in England so this question relates primarily to the laws in England and Wales. However, I am considering investing into Glasgow too so if anybody can tell me how it works up there in Scotland, given that they only have custodial deposit protection schemes, I would also be interested in that too.

Thank you for your help.

Gwen Jones

UPDATE ADDED BY MARK ALEXANDER – 13:54 on 19th December 2012

Tweets from DPS and MyDeposits below – HOWEVER – also see comments from TDS and others below this post.

Comments

Paul Shears

17:42 PM, 18th December 2012
About 7 years ago

Regarding a HMO type property, my understanding from using the MyDeposits service is all they required was for me to tell them when the names of the tenants change.
As long as one of the original tenants remains they did not require any further payment from me for the duration of the orginal cover.
However because I forgot to tell them that an individual tenant had moved out and a new one had moved in, I had to pay the token fee of £30 (If I recall correctly) again & start a new 12 month MyDeposits registration.

17:47 PM, 18th December 2012
About 7 years ago

A deposit remains protected until the tenancy ends whether the initial term is extended with a replacement tenancy or, where a statutory periodic tenancy has been created. Check with your deposit scheme whether you need to update any records.

18:33 PM, 18th December 2012
About 7 years ago

TDS members need to log in to their account online and tick a box updating it to statutory periodic ( instructions are available in the Website User Manual). If you do not do this protection will end on the original end date of the agreement. We do advise that you also send the updated certificate to the tenant so they know their deposit is still protected.

If there are any changes to the tenancy agreement such as rent then you do need to re-register the deposit.

I would strongly advise you contact the scheme of which you are a member who can give you more detailed advice on your situation.

Industry Observer

19:02 PM, 18th December 2012
About 7 years ago

Unfortunately you mention everything in connection with TDP and the protection, or re-protection of the deposit itself, and issuing or re-issuing certificates, or getting into the Scheme and changing details to reflect the tenancy has gone periodic.
But6 you don't mention the critical issue, which all of the Schemes also overlook, which is the Prescribed Information and the need to re-issue it.
The reason it needs re-issuing is because whan a tenancy goes periodic courtesy of s5 Housing Act 1988 it is a new tenancy. Because no-one actually needs to do anything - periodics just develop a life of their own - this new tenancy status gets overlooked. In TDP terms a fixed term ending and a periodic arising is no different to you re-letting the property to a new tenant. You have what for a better name can be called a "protectable incident" - something has happened that means the protection obligations kick in.
Now the money may not be an issue and if with DPS is already protected. With Mydeposits you have to pay another fee.
But you need to reissue the Prescribed Information, it is the only way to be 100% belt and braces certain that you have not committed an offence. By all means do not bother, and there are many who would disagree with my position on this. But there are also many wise heads who would agree - after all, why take the risk?
So yes change whatever data the Scheme requires you to, and pay any fee. But make sure you re-issue the PI. And with all due respect if you ask any Scheme advice on this only speak to someone VERY senior and get their advice to you IN WRITING.

Mark Alexander

21:07 PM, 18th December 2012
About 7 years ago

@IndustryObserver - please point me to the specific elements of legislation you are referring to in order to justify you comment "when a tenancy goes periodic courtesy of s5 Housing Act 1988 it is a new tenancy"?

I am neither disputing nor agreeing with your opinion at this stage. However, I want to read this in black and white for myself and as this is such a verbose piece of legislation I'm hoping you can save me some time.

I'm also hoping that you are wrong, otherwise, most landlords in the UK are going to be in VERY deep trouble and facing a similar prognosis to the worst fears as expressed in Gwen's readers article.

3:37 AM, 19th December 2012
About 7 years ago

There is NO requirement to reprotect a deposit if the tenancy proceeds onto a SPT; no ifs buts or maybes. period.
It is however necessary for AST conditions to confirm to the tenant before it gets to SPT stage that if the LL hears nothing from the tenant that it shall be presumed that the tenant is happy for the tenancy to proceed onto a SPT.
Of course there is NOTHING in law which prevents a tenant surrendering the fixed term tenancy on the last day WITHOUT ANY NOTICE IRRESPECTIVE OF WHAT THE AST STATES!!!!!
That is the LAW!

4:49 AM, 19th December 2012
About 7 years ago

Sorry you are wrong; with mydeposits there is NO requirement to reprotect a deposit registered with them if proceeding onto a SPT.
I have sought advice from them and they state categorically that so such requirement exists if everything on the original fixed term AST remains
Who is giving you this duff information!?
There is NO requirement to reissue prescribed information
If you want I will contact mydeposts AGAIN and speak to the CEO and get an email confirming everything I have stated is CORRECT.
These matters are of such critical importance that ALL LL need absolute certainty as to the efficacy of the advices we have received.
You are throwing doubt on those advices.
Now you are most likely wrong; but if you are correct then we are all in deep s--t!!!!.
I can ONLY speak for the mydeposits scheme here.

5:51 AM, 19th December 2012
About 7 years ago

EVERY time there is ANY change on the AST, except rent if resolved via S13 then a new DPC MUST be issued along with NEW PRESCRIBED information, EVEN IF NOTHING ELSE HAS CHANGED.
That means tenants leaving, being added to or reducing; EVERY CHANGE!!!
This is for the mydeposits scheme members.
I do NOT know what requirements other schemes have!
This means that the tenants existing or leaving or adding to will have to pay the £30 'admin' fee unless you the LL wish to cough up! every time your tenants wish to change the AST!!
This means anyone who is party to contributing to the deposit even if they are replacing a partial deposit of someone who is leaving, MUST receive within 30 days a new DPC and PRECRIBED information.
Believe me your printer will be using up ink like no tomorrow as you MUST issue this DPC to ALL tenants, even if it just duplicates what you may have issued to other tenants before.
So an extreme example
Lets say you have 3 tenants in a property and 1 leaves to be replaced with another acceptable to you.
That means 3 DPC's and 3 sets of prescribed information MUST be issued within 30 days of receipt of a partial deposit from the new tenant if that is how the new tenant contributed to the overall deposit.
To play absolutely safe post 2 copies for the attn of each tenant and confirm with them that they have received at least 1 copy within the prescribed 30 days.

Antony Richards

12:15 PM, 19th December 2012
About 7 years ago

What a perverse way of doing things. You appear to be assuming that all tenancies end at the end of the fixed period when in our experience most do not. Surely the deposit remains protected until such time as it is returned (or kept) and then the website is updated

Mary Latham

15:23 PM, 19th December 2012
About 7 years ago

Industry Observer I too would like to read that legislation can you please provide details of where in legislation an AST becomes a "new tenancy" at the end of the fixed term?
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