Residential Property Leaflet: Volume 2
New Legislation concerning Tenancy Deposits in 2015:
Whether received before or after April 2007 ALL tenancy deposits must be secured and they must be done so before 23rd June 2015.
The creation of deposit schemes following the Housing Act 2004, made Landlords believe that a deposit need not be protected if received before 6th April 2007 when the Act came into force, unless a new tenancy agreement was granted.
Charalambous –v- Ng (2014);
This case shaped the way for security of tenancy deposits.
In this case the Landlord failed to protect the deposit, which was received in 2002, before the Act came into force.
Despite the fixed term ending in 2005 and there being no authorised deposit schemes available at the time the deposit was received or when the periodic tenancy arose, the Landlord failed to obtain possession.
The Court of Appeal held that in order for Section 21 to be used, the deposit must be protected before a Section 21 Notice is served.
Deregulation Act 2015;
The Deregulation Act brings clarity to the question as to whether to secure a deposit.
The Act amends the Housing Act as reading:
“whether before, on or after 6 April 2007…….no Section 21 notice may be given……when the deposit is not being held in accordance with an authorised scheme”.
The uncertainty flowing from the Housing Act and subsequent case law is now clear.
All deposits, no matter when received, must be secure.
The Deregulation Act grants Landlords 90 days from the commencement of the Act (26th March 2015) to secure their deposits.
Failure to do so will lead to sanctions, including a fine of up to 3 times the value of the deposit. A possession claim under Section 21 will also fail, unless the deposit is secure.
What does this mean for Landlords?
Whether received before or after April 2007 ALL tenancy deposits must be secured and they must be done so, before 23rd June 2015.
Landlords must also remember to serve the prescribed information on their tenant within this timescale.
If you want expert advice on Residential Landlord and Tenant matters, please contact:
James Cross – 01803 206203
Rhoda Honey – 01803 206218
The property litigation team are also experienced in dealing with possession relating to commercial properties, so please get in touch.
To download this leaflet please click on the link below:
"This publication is distributed by Kitsons LLP for general information only and is not intended to constitute professional advice. Specific professional advice should be obtained before acting on any of the information contained herein. Whilst Kitsons LLP is confident of the accuracy of the information in this leaflet at the date of publication, no duty of care is assumed to any direct or indirect recipient and no liability is accepted for any omission or inaccuracy."