12:17 PM, 4th January 2013, About 10 years ago 8
When do you need to re-protect tenancy deposits? Clarification from TDS
Following an article on Property118 before Christmas some agents and landlords expressed concern as to whether they are approaching deposit protection at the end of the fixed term in the correct way.
We are happy to give some clarification on the matter, and to advise landlords that we will soon be making our processes more user friendly.
Please note that these points only relate to members of the TDS Tenancy Deposit Scheme.
TDS for Landlords is less than one year old and although we’ve had really positive feedback on how quick and easy it is to register deposits, we know this part of the process can be made easier for landlords. As such, we will soon be updating the system so that tenancies in TDS for Landlords will automatically become statutory periodic at the end of the fixed term and remain protected. We have been aware of this issue but it has been really useful to hear the views of landlords on Property118.
Even if your deposit protection is automatically renewed it is important to ask yourself – is my tenancy definitely statutory periodic?
A statutory periodic tenancy is created when the end date of a fixed term tenancy has been reached and allowed to continue on the same terms. You don’t need to issue new prescribed information when this happens.
However, if any material changes have been made to the original agreement, such as an increased deposit amount or a change in tenants, then under the scheme rules, you must re-protect the deposit.
A renewed agreement requires the deposit to be re-protected and prescribed information to be re-issued.
If you make changes to the agreement but don’t update your deposit protection you may be in breach of the Housing Act. You will have created a renewed agreement but left the deposit registered as though the original agreement was continuing on the same terms.
It is for the courts to decide if the law has been followed correctly. However, we don’t yet have any case law on deposit protection at the renewal of a tenancy. Therefore based on advice from DCLG and given the surprisingly strict penalty imposed by the Court of Appeal in Ayannuga v Swindells, at TDS we advise our members that it is better to provide too much paperwork than not enough.
The above is an official press statement issued by TDS. Their communications officer Chris Kendall is subscribed to this thread in order that he may received notifications of any comments made and so that any questions you raise can be dealt with promptly.
Previous ArticleRent Guarantee Insurance for LHA Tenants