The Tiensia case more or less put a coach and horses through the tenancy deposit regulations.
In fact when I spoke at a Landlords Association meeting recently, one of the things I was asked to speak about was the ‘new’ tenancy deposit rules.
“Is it now necessary to lodge them or can you hold them in a separate account as before but then lodge them if there is a contention?” was the question put to me.
There is no point in having tenancy deposit regulations if there is no penalty for non compliance. Landlords will inevitably fail to comply (not all, but certainly some). So it seems that the Localism Bill is going to be used to plug the loopholes exposed by the recent cases.
The Commons Committee considering the Localism Bill will be debating amendments to the Housing provisions in Part 6 of the Bill this week. You can see the current list of amendments tabled for debate here.
Interesting points are:
- The period for protection looks as if it is going to remain 14 days, despite complaints that this is too short. The period suggested in the Scottish regulations was 30 days.
- The amendments provide that a deposit must be protected at the start of ‘a replacement tenancy’ if the deposit money is retained, and the definition given follows the wording of s5 of the Housing Act 1988 – meaning that landlords will no longer be able to avoid the tenancy deposit regulations by allowing the tenancy to run on as a periodic.
- The penalty is no longer going to be fixed at three times the deposit sum. The Judges are gong to be given a discretion to award a sum they consider reasonable up to a maximum of three times the deposit sum. Which will please the Judges greatly. One of their main objections to the current rules is that (before the loopholes were exposed) they were being forced to make the award in circumstances where they considered it unfair (such as this case).
These are just proposals and may not reach the final version of the Bill. However, David Smith writing in the Nearly Legal blog considers that something like these amendments are likely to survive.
In which case the Landlord Law Tenancy Deposit claim scheme can be restored – at present we have withdrawn it due to the difficulties raised by the recent case law.
What do you think of the proposals?