Tenancy Deposit Legislation

Tenancy Deposit Protection In April 2007 it became law (Housing Act 2004) that all deposits collected by Landlords or Agents, [even renewing an AST] need to be registered in either a custodial scheme or an insurance based scheme. These schemes protect all deposits on Assured Shorthold Tenancies in England & Wales.

Within 30 days of receiving a deposit the Landlord or Agent must lodge the deposit in a scheme or insure it. They must also give the tenant and any other person/entity who provided the deposit, details about how their deposit is protected including:

The contact details of the tenancy deposit scheme selected.
Provide the prescribed information and schemes' conditions to the tenant and other person(s) who may have paid the deposit (parent etc).
Details from the scheme of how to apply for the release of the deposit.
Information explaining the purpose of the deposit and definition of how such monies would be returned.
What to do if there is a dispute about the deposit.

Penalties for failing to comply

If a Landlord or Agent fails to comply with the deposit legislation they maybe ordered to pay the Tenant three times the amount of rent paid over the duration of the tenancy, with further penalties that may include being unable to serve a Section 21 Notice, until the deposit has been protected and the prescribed information has been supplied to the Tenant and any other relevant person.

Tenancy Deposit Protection is designed to ensure:

Tenants get all or part of their deposit back, when they are entitled to it.
Any disputes between Tenants and Landlords or Agents will be easier to resolve.
Landlords and Letting Agents who do not protect tenancy deposits may have to pay their Tenant back three times the deposit.

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