Frequently asked questions on the changes to the Tenancy Deposit Protection legislation and their impact on landlords and tenants, effective 6 April 2012.
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Why has the Tenancy Deposit Protection legislation been changed?
The intention of the tenancy deposit protection legislation was that penalties for non-compliance should apply both where a landlord protected the deposit after the deadline set in the legislation and where the deposit related to a tenancy that had subsequently come to an end. A number of Court of Appeal decisions threw some doubt on whether this was the actual effect of the legislation as originally drafted. In response to the Court of Appeal decisions, the government introduced an amendment to the tenancy deposit protection legislation in the Localism Act 2011, which will clarify and reinstate its original intention.
What changes have been made to the Tenancy Deposit Protection legislation?
The legislation has been changed:
- To make it clear that penalties for non-compliance apply to a tenancy that has come to an end after 6 April 2012.
- To make it clear that penalties for non-compliance apply where the landlord or agent protects the deposit after the deadline.
- The deadline for the protection of deposits has been extended from 14 days to 30 days.
- The financial penalty for non-compliance has been changed from three times the amount of the deposit to between one and three times the deposit to give the Courts more discretion as to the level of the financial penalty imposed for non-compliance.
When do these changes come into effect?
These changes came into effect on 6 April 2012.
What do the changes mean for landlords and agents?
The changes mean that landlords and agents will have more time to protect deposits in one of the government authorised schemes and more time to provide the tenant with the prescribed information, telling them which scheme the deposit has been protected with. Both these deadlines are now 30 days. The information that has to be provided to the tenant has not changed.
Are the changes retrospective?
No. The amendments apply to any deposit received in connection with an assured shorthold tenancy which the Housing Act 2004 applies to and which was in effect on or after 6 April 2012.
What about existing tenancies where the deposit is not protected?
Where a deposit taken for an assured shorthold tenancy before the 6 April 2012 has not already been protected in one of the government authorised schemes, the landlord or agent will need to protect the deposit within 30 days of 6 April 2012. If the deposit is not protected within that 30 days the landlord or agent would be subject to the full range of penalties under the amended legislation. This only applies to deposits which the Housing Act 2004 applies to.
Where can I get more information about Tenancy Deposit Protection?
The Communities & Local Government have produced a factsheet on tenancy deposit protection which is available here.
