The Localism Act has brought about changes to the Housing Act 2004 regarding Tenancy Deposit Protection.
These changes came into effect on 6th April 2012, meaning that:-
- New tenancies created on or after 6th April 2012 will be covered by the new requirements.
- Tenancies already in existence on 6th April 2012 have 30 days to comply with the new requirements, if they have not already done so.
- The new requirements will only apply to Court proceedings for a breach of the Housing Act, where those proceedings started on or after 6th April 2012.
Here is a summary of the changes:-
30 days – not 14 – to protect deposits
From 6th April, landlords and letting agents have 30 days from receipt of deposit in which to protect it.
The re-wording and extension of this timeline closes any loopholes with regards to deposit protection deadlines so that, now, if a deposit is not protected within 30 days, the tenant can take their landlord or letting agent to court – there is no other way to interpret this legislation.
A tenant may make an application to a county court for a penalty award against a Landlord or Agent even if the deposit has been protected after 30 days, although the courts will then take the fact that protection has occurred into account when deciding what level of penalty to impose.
A claim can be made even where the tenancy has ended.
Once the tenancy has ended the landlord cannot retrospectively protect the deposit in order to comply with the Act and avoid penalties. If the tenancy has ended, the only option is for the landlord to repay the deposit, or part thereof, to the tenant.
The courts have discretion to award not less than the amount of the deposit and not more than three times that amount depending on the individual case. e.g a repeat offender may find themselves with a larger fine compared to a landlord who has simply forgotten to protect as an administrative oversight.
The requirement for providing the Prescribed Information to the tenant has also changed to within 30 days of receipt of the deposit.
It is the landlord or letting agent’s responsibility to ensure that it is issued at the correct time, so should be given to the tenant(s) along with their copy of the signed AST.
Section 21 notices
A Section 21 notice for possession may not be given where a deposit has not been protected within the 30 day period. However, this prohibition may be mitigated where:
-the deposit has been returned to the tenant in full or with such deductions as have been agreed;
-an application to the county court under section 214 has been made and has been determined by the court or withdrawn or settled between the parties.