The government has recently warned Landlords to get their acts together on deposits following the Localism Act achieving Royal Assent in December it’s now confirmed that changes to tenancy deposit protection, introduced by the Bill, will come into force on 6th April. Tenancies already in place on this date will have 30 days in which to comply with the new rules.
Further warning has come from the TDS (Tenancy Deposit Scheme) which is telling its members that the new rules will also affect existing tenancies where the deposit has not been properly protected. The TDS is advising its members to act right now if that is the case, as the new rules will affect deposits which have already been taken but not yet protected. Under the new rules, deposits under assured shorthold tenancies must be protected within 30 days of receipt (as opposed to 14 days at present). The tenant must also be given the prescribed information within 30 days. Failure to comply with the 30-day rule means that landlords could have to pay a penalty of between one and three times the amount of the deposit. Failure to protect the deposit within 30 days will also mean that landlords cannot use the Section 21 procedure to evict a tenant unless there has been a court order dealing with the deposit or unless the deposit has been returned. The ban on using the Section 21 procedure also applies to landlords who have protected the deposit but not given the prescribed information within 30 days. Landlords should also be aware that they will still be liable for penalties up to six years after the end of a tenancy if they haven’t done things using the correct formalities. The new rules will apply to deposits which landlords are already holding when they come into force. You will be allowed a 30-day period of grace from the start date to protect these deposits and/or give the prescribed information if you have not done so already. Failure to comply will mean that the new penalty and Section 21 rules will apply in exactly the same way as they do to new deposits.