Landlords have until tomorrow evening 23rd of June to protect any outstanding tenancy deposits they took for tenancies commencing before that date, otherwise they will be barred from using the no-fault section 21 eviction process.
The Deregulation Act 2015 brought in an amnesty, which means landlords will not be penalised in this way for any tenancy deposits received before 6 April 2007, if they protect them before 23rd June in one of the three government approved schemes.
There has been much confusion over the rules regarding tenancy deposits since the law was brought in in 2007 chiefly because the original legislation was so badly drafted.
A whole series of court cases brought in rulings which have necessitated several changes to the legislation, the last of ones of these in the Deregulation Act 2015 is an attempt to clarify the situation once and for all – don’t hold your breath.
As well as protecting the actual deposit itself, much confusion has surrounded the prescribed information, a legal notice which MUST be served on the tenant along with protecting the money, all within 30 days of receipt.
The prescribed information is a specific legal form which can be downloaded from the websites of all the deposit agencies. Known as a section 213 notice this is not the same document as the leaflet sent by the agencies about the deposits, though one of these should accompany the s213 notice served on the tenant by the landlord.
Note: landlords cannot rely on the documentation sent to the tenant by the deposit agency when the deposit has been protected – the prescribed information MUST be served by the landlord.
Methods of service of notices should be specified in the tenancy agreement, so whatever methods have been agreed will suffice, but hand delivery is always preferable, and obtaining documentary proof of service is a must.
Where landlords took deposits post 6th April 2007 and have not protected them within 30 days, they will be subject to a fine of up to three times the deposit if their tenant pursues them in court, even if they protect it now. They will also be unable to serve a valid section 21 notice to evict.
Their only remedy for s21 eviction is to agree with their tenant to repay the deposit, but landlords will still be subject to the fine if the tenant pursues the matter in court.
None service of the prescribed notice is less serious as it can be served late, but this MUST be done BEFORE service the section 21 notice.
Another change brought in by the Deregulation Act will come as a relief to a lot of landlords and agents; over the re-serving of the prescribed section 213 notices on tenancy renewals and when tenancies automatically become periodic.
The Court of Appeal decision in Superstrike v Rodrigues (2013) brought in the perverse situation where tenancies had to be re-protected and another prescribed notice served on renewal and when the tenancy became a periodic one. This no longer applies.
How to Win Deposit Disputes by Tom Derrett©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.