Wrong wording confuses new deposit protection rules. The Communities and Local Government Department (CLG) has already issued revised guidance about the regulations before they even come in to force.Make Text Bigger
Following the letter of the law is seemingly a problem for government solicitors as well as property investors over deposit protection rules starting on October 1.
The Communities and Local Government Department (CLG) has already issued revised guidance about the regulations before they even come in to force.
The problem seems to be no one properly checked the wording before the regulations were signed off by the then departing Labour government and the word ‘new’ was missed out.
The rules should have stated ‘new agreements’ rather than ‘agreements’ so contracts already running were not included.
The updated rules were designed to offer deposit protection to all tenants by extending assured shorthold tenancy agreements (AST) to cover rent of up to £100,000 charged in a 12-month period.
Currently, an AST only covers rent over 12-months up to £25,000.
Last week, the CLG had to announce doubts if deposit protection could apply to tenancies that were not ASTs at the time they came in to force and suggested deposit protection would cover new tenancy agreements, renewals and new deposits taken on or after October 1, 2010.
Now, the CLG has reconsidered and advised that all deposits for tenancy agreements of up to £100,000 a year, going back to April 6, 2007 should be protected.
This is aimed at stopping a tenant bringing legal action under the deposit protection rules against a landlord who did follow the rules for older tenancies.
The suspicion is advice about imposing regulations is not necessarily a robust defence in court for a landlord and that the regulations should be revoked or amended so, property investors and tenants have no doubts about the meaning of the rules.
Leaving legislation open to misinterpretation is not helpful for either party to an assured shorthold tenancy agreement and leaves both open to financial loss or penalties.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.