Landlords of properties subject to tenancies that began prior to 6 April 2007 have until 23 June to protect their tenancy deposits in an approved deposit protection scheme if they wish to avoid fines and potential difficulty regaining possession of their properties.
The Deregulation Act 2015, which was enacted on 26 March 2015, clarified the government’s stance on deposits that were taken before the commencement of deposit protection legislation on 6 April 2007, as well as the reissuing of prescribed information at the beginning of a periodic tenancy (confusion around which arose as a result of the high-profile county court case of Superstrike Ltd. Vs Rodrigues in 2013).
Under section 32 of the Act, landlords who:
- Took a deposit for a tenancy that began before 6 April 2007, and has since become a statutory periodic tenancy;
- Did not protect the deposit; and
- Still hold the deposit in respect of the same tenancy
Have until 23 June 2015 (90 days from the commencement of the Act) to register the deposit with a government-approved protection scheme and comply with the rules of that scheme. If they do not, the full penalties for non-compliance will apply:
- A fine of up to three times the value of the deposit
- Restrictions on regaining possession using the no-fault section 21 eviction notice
Note that simply protecting the deposit is not enough: you or your representative must also comply with the protection scheme terms, including issuing prescribed information to your tenant.
Steve Harriott, chief executive of the Tenancy Deposit Scheme, said:
“Landlords have only a matter of weeks to comply before the amnesty ends and penalties take effect. A small number of deposits are exempt but I would urge any landlord who holds an unprotected deposit to register it…
“We have seen a surge in landlords contacting us in recent weeks. Many have only just become aware that they should have already protected deposits; a stark reminder that thousands of landlords have been falling foul of deposit protection law, often unknowingly.”
Find out more about tenancy deposit protection in our deposit protection article category.