“TDS” clarifies scheme rules on when to re-protect depositsMake Text Bigger
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.
What do I need to do to ensure that I am complying with TDS rules?
Please note that these points only relate to members of the TDS Tenancy Deposit Scheme.
- I am a letting agent member of TDS, and the fixed term tenancy is becoming statutory periodic: No action is required. You have an annual membership and your deposits remain protected until you remove them or until your membership ends. You do not need to re-issue a certificate or prescribed information.
- I am a landlord and the fixed term tenancy is becoming statutory periodic Members of TDS for Landlords need to update the status of the tenancy to statutory periodic. You do not need to re-issue prescribed information. A revised certificate is generated in your online account but it isn’t mandatory to give this to the tenant. You and your tenant will receive reminders that the fixed term is ending and that action is required so that protection of the deposit continues. At present, if you do not update the record to statutory periodic then protection will end.
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.
Note from Property118
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.
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