Should I sell or risk tenants buying at undervalue price?9:08 AM, 25th September 2019
About 3 weeks ago 48
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.
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