Tenancy Deposit Protection legislation: Update for Assured Shorthold Tenancies


As of 6 April 2012, the Tenancy Deposit Scheme legislation has been updated so as to allow landlords a 30 day period in order to ensure full compliance with the regulations stipulated under the Housing Act 2004.

Tenancy Deposit LawThe new provision seeks to extend the period of landlords obligation to comply with the Scheme from 14 days to 30 days. This period applies to both the period in which the landlord must ensure the deposit is protected as well as providing the prescribed information to the tenant.

The new provision has been outlined under section 184 of the Localism Act 2011 and is currently in force. It amends sections 213 to 215 of the Housing Act 2004 and states that the period in which the landlord has to ensure the deposits secured within a tenancy agreement and protected is now 30 days. Within this period, the landlord must ensure the deposit funds are placed into an approved government protection deposit scheme and the prescribed information under the Housing Act 2004 is provided to the tenant. Failure to comply with these regulations will result in financial penalties to the landlord.

In essence the amendments have been introduced as a result of several Court of Appeal decisions that raised concern over the effect of the provisions under the Housing Act 2004. The current legislation now seeks to supplement and refine the provisions and sets a fairer approach for landlords to comply with their obligations. In addition to this, the legislation now also sets out a fairer penalty to impose on landlords including a more flexible approach in terms of the sanctions which a court may impose on a landlord for non-compliance. Previously, the Housing Act indicated a hard line penalty on a landlord to compensate tenants 3 times the deposit amount for failure to comply. Now, the court reserves the position on these punitive measures and is able to impose a penalty between one to 3 times the deposit amount to the tenant where a landlord has not complied with the requirements of the Scheme.

The new provisions apply to any assured short hold tenancy agreements which were still in effect on or after 6 April 2012. In circumstances where a deposit was taken before 6 April 2012, then landlords or agents must ensure the deposit is protected in accordance with the Scheme within 30 days of 6 April 2012. Any failure to comply with the new provisions will result in penalties being imposed.

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