Tenancy Deposit Protection
The Localism Act that came into force on the 6th April set out new laws in relation to protecting a tenants deposit with tougher penalties for those who do not comply.
Landlords and Letting Agents now have up to 30 days to protect a deposit rather than 14 days which “removes any excuse of ‘administrative delay’ from a defence.” (Property118) Tenants must now also be given the required Prescribed Information and Deposit protection Certificate as proof it is protected. Failure to protect a tenants deposit will result in a fine that will now be at the discretion of the court, rather than the fixed three times the deposit.
“The big difference for tenants is they can make a claim against a landlord who did not safeguard a deposit in an approved scheme for up to six years after they have moved on instead of 30 days under the old rules. Landlords … cannot avoid a fine by lodging the deposit retrospectively – the offence is absolute, either the deposit was lodged within the 30 day limit or it was not.” (Property118)
With these changes though there is not an increased confidence in the way the system works. A UK wide survey found “54% (landlords) believing they (deposit protection schemes) favour tenants and 35% thinking neither benefit. Letting agents also largely mirrored that sentiment with only 20% thinking that the schemes, in their current format at least, favoured landlords and 52% saying that the balance has been tipped in favour of tenants. A further 22% felt that the schemes benefit neither party.” (PropertyWire)
Despite the scheme not fully satisfying, it is a legal obligation and if a deposit is not registered it can mean that a landlord or letting agent would be unable to seek possession of the property using a section 21 notice until the penalty was settled.
RentPro allows you to easily keep track that all deposits are received and then lodged with the deposit protection scheme you are using, be it a custodial scheme or an insurance based scheme, and when the time comes to returning a deposit be it all or part there of also allows you to enter this information.