The Deregulation Act explained for landlords – Part 2 – Tenancy Deposits

Sections 30 – 32 of the Deregulation Act 2015 aim to rectify flaws in tenancy deposit protection legislation contained within the Housing Act 2004. Several cases, including Superstrike, have caused difficulty for landlords regarding non-compliance. The new provisions set out the position in cases where the deposit was received either before or after 6 April 2007 (the date when the deposit protection legislation was originally introduced).

Firstly, where a deposit was received before 6 April 2007 in connection with a fixed term which rolled over into a statutory periodic tenancy on or after that date and the deposit is still held by a landlord in connection with the periodic tenancy, the landlord has now until 23 June 2015 to ensure that the deposit is protected and the prescribed information served. If a landlord takes these steps (subject to any court proceedings as below), they will not be liable for a penalty claimed by the tenant.

It is worth noting that the date of 23 June 2015 may be brought forward if matters are before the Court for determination of an application for a penalty before 23 June 2015. In that case, the landlord should comply before the date of the Court hearing.

In cases where a deposit was taken by a landlord on or after 6 April 2007 which was placed in a deposit scheme and the prescribed information served, if that tenancy subsequently became or becomes a statutory periodic tenancy then the landlord’s original compliance in protecting the deposit and serving the prescribed information will suffice for the purposes of the statutory periodic tenancy. Therefore, if the landlord originally registered the deposit during the fixed term and complied with the prescribed information requirements, there is no need to re-protect or re-serve.

However, the amendments do not offer protection to landlords who did not originally protect the deposit.

Further, the new legislation confirms that where a tenancy became periodic before 6 April 2007 and an unprotected deposit continues to be held, whilst there is no financial penalty payable, the deposit should be protected if the landlord wishes to serve a Section 21 notice.

The above provisions are in force now and have retrospective effect back to 6 April 2007. There are some transitional provisions within the Act which would need to be considered on a case by case basis as they affect matters subject to Court proceedings and issues relating to costs. I am happy to consider any queries that landlords have in this respect.

The Act has also confirmed that it is acceptable to provide the details of the agent, on behalf of the landlord, who protected the deposit within the prescribed information rather than the landlord’s details.

Clarification has, at least, been provided to address issues that have arisen within cases over the last few years. Nonetheless, this is the third attempt in settling deposit legislation and we must wait and see how matters pan out.