Tenancy Deposit Protection legislation changes at midnight on 5th April DO NOT GET CAUGHT OUT!Make Text Bigger
I am going to keep it simple I have written two articles with full details but here is the short version including TWO NEW WARNINGS
- A tenant’s deposit must be protected within 30 days of taking it for all deposits taken on or after 6th April.
- Existing deposits that were taken more than 30 days ago must be protected by midnight on 5th April.
- When you sign up a new AST and rollover a deposit this is deemed to be a new tenancy and the deposit must be protected again if it is covered by one of the insured schemes.
- Any monies taken to cover loss of rent or damages or losses to landlords property is a deposit regardless of the name it may be given.
- A guarantee or bond is not a deposit unless money changes hands and does not need to be protected.
- A deposit protection fee may not be charged to the tenant but an admin fee can be charged for unspecified administration services.
- The protection fee is tax deductible.
- The deposit protection certificate and prescribed information must be given to the tenant(s) and to any third party who provided the deposit.
- A Section21 notice will not be enforceable unless:
- The deposit was protected within 30 days or has been returned to the tenant prior to the issue of the S21 Notice
- The deposit protection certificate and prescribed information was given to all tenants and any 3rd parties involved
TWO NEW WARNINGS
- If you are using the custodial scheme make certain that you give them valid contact details for the lead tenant, failure to do so meant that last autumn according to the DPS website –
“Over 8,000 deposit repayments valuing almost £5 million are waiting for the response of the lead tenant before the deposit can be repaid”.
I don’t imagine that these tenants expected their deposits to be returned, otherwise I would have thought that they would be chasing DPS and it is fairly safe to assume that much of this money is due to landlords.
One of the mistakes often made by landlords who let to students is to give the DPS the students’ university email address which is closed when the student graduates.
- The deposit must be protected in the name of the registered property owner (landlord) unless you are registered with one of the schemes as an Agent
Last week I received a call from a landlord who has 150 deposits protected with one of the insured schemes. During a dispute it became known to the scheme that the deposit in question was protected in the name of the landlord’s son after they had spot checked at Land Registry! The scheme has said that this deposit protection is invalid. It appears that many of this landlord’s deposits were protected in his sons name and now they must be newly protected before midnight on 5th April otherwise they will fall foul of the legislative changes. Ouch!
There are many potholes in the road for landlords, but tenants deposit protection is about to become a minefield and I hope you will forgive me for banging on. I will only post further warnings if I become aware of new issues.
The articles where more details can be found are here
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