Tenancy deposits amendment in Localism Bill

Liberal Democrat MPs Stephen Gilbert and David Ward have tabled a new clause for the Localism Bill that would amend the tenancy deposit protection provisions in the Housing Act 2004.

David Smith, writing in Nearly Legal, says:

"The changes dispose of the unclear concept of ‘initial requirements' and remove the late protection loophole revealed by cases such as Draycott v Hannells and Tiensia v Universal Estates.

"They also remove the loophole utilised by some landlords of returning the deposit to the tenant and then asserting that s214(4) only requires that they pay the three times penalty if they have also been ordered to pay the deposit back. This will mean that tenants will find it far easier to pursue landlords or agents who have failed to protect their deposits and landlords will not be able to rush deposits into schemes after the 14 day period and thereby avoid penalties.

"The changes also clear up other areas of uncertainty, such as the status of multiple tenants, which have not yet come before the higher courts."

Smith goes on to explain that the amendment also brings improvements for landlords as it would mean that ignorant landlords will still be penalised but they should be able to bring the size of the penalty down to a more manageable level.

He believes it's likely that the amendments will receive government backing and go through into legislation.