Solicitor David Smith reports on the changes on tenancy deposit law coming very soon in the Deregulation Bill
Note – the Deregulation Act has now received the Royal Assent so the new rules discussed below are now law
In February the House of Lords passed the Deregulation Bill and this is now just waiting to receive the Royal Assent.
This must happen before the end of March so it could be any day now.
Unusually, the provisions relating to tenancy deposits will come into effect immediately. This is good news for landlords, as it will wipe out the issues which arose following the case of Superstrike.
Here is a summary of the main changes:
- Any deposits taken before April 2007 where the tenancy has become periodic after that date, must be protected and the prescribed information must be served within 90 days. At which point the deposit will be treated as if it had always been protected.
- Any deposits taken after April 2007 that were protected with the prescribed information have been served at some stage during the initial tenancy, will be treated as if the prescribed information had been served on every renewal or whenever a statutory periodic tenancy arose.
- Any deposits taken before April 2007 which became periodic before that date must be protected or the money returned to the tenant (or the person who paid it) before a s21 notice can be served. Landlords will not be liable for any financial penalty for non protection.
- The prescribed information rules are amended to allow for agents details to be given instead of landlords details where the agent is dealing with the deposit.
- The 90 day period is a chance for all landlords and letting agents to regularise the situation regarding their pre April 2007 deposits.
If you are a landlord or a letting agent, you should check all your properties NOW.
Make sure that all pre April 2007 deposits which went periodic after that date (in respect of assured shorthold tenancies) are properly protected and the prescribed information served, before the end of this period.
This is a final chance to regularise situations where deposits have not been protected or the prescribed information served.
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