Localism Bill changes to Deposit Laws April 2012
The Housing Act 2004 governs tenancy deposit protection. The 2012 Localism ACT Further Defines (enforcement and Penalties)
Following two Court of Appeal decisions which highlighted some areas of doubt in the existing legislation, the new clause would clarify that the financial penalties in the Legislation apply where a deposit is protected after the deadline set by the legislation and that the financial penalties apply equally after the tenancy with which the deposit is associated has ended. The new clause would also extend the deadline, in which the landlord must protect the deposit and provide information to the tenant about that protection, from 14 to 30 days. It would give the Courts discretion to set the financial penalty for non-compliance at a figure between a sum equivalent to the deposit and a sum equivalent to three times the deposit. Currently, the Courts have no discretion and the penalty is set at three times the deposit. Finally, the clause would clarify that the other penalty associated with non-compliance – removal of the power to use section 21 of the Housing Act 1988 to evict – would be reversed once action had been taken to rectify the situation
Tenants’ deposits as define by the legislation
184 Tenancy deposit schemes
(1) The Housing Act 2004 is amended as follows.
(2) In section 213 (requirements relating to tenancy deposits)—
(a) in subsection (3) (landlord’s requirement to comply with initial
requirements within 14 days of receipt of deposit) for “14” substitute
“30”, and Localism Act 2011 (c. 20)
Part 7 — Housing
Chapter 6 — Other housing matters
193
(b) in subsection (6)(b) (landlord’s requirement to give tenant information
within 14 days of receipt of deposit) for “14” substitute “30”.
(3) Section 214 (proceedings relating to tenancy deposits) is amended as follows.
(4) In subsection (1) (grounds for an application to a county court) for paragraph
(a) substitute—
“(a) that section 213(3) or (6) has not been complied with in relation
to the deposit, or”.
(5) After subsection (1) insert—
“(1A) Subsection (1) also applies in a case where the tenancy has ended, and
in such a case the reference in subsection (1) to the tenant is to a person
who was a tenant under the tenancy.”
(6) In subsection (2) (conditions for a remedy)—
(a) in the opening words for “if on such an application” substitute “in the
case of an application under subsection (1) if the tenancy has not ended
and”, and
(b) for paragraph (a) substitute—
“(a) is satisfied that section 213(3) or (6) has not been
complied with in relation to the deposit, or”.
(7) After subsection (2) insert—
“(2A) Subsections (3A) and (4) apply in the case of an application under
subsection (1) if the tenancy has ended (whether before or after the
making of the application) and the court—
(a) is satisfied that section 213(3) or (6) has not been complied with
in relation to the deposit, or
(b) is not satisfied that the deposit is being held in accordance with
an authorised scheme,
as the case may be.”
(8) After subsection (3) insert—
“(3A) The court may order the person who appears to the court to be holding
the deposit to repay all or part of it to the applicant within the period of
14 days beginning with the date of the making of the order.”
(9) In subsection (4) (amount of penalty payment)—
(a) omit “also”, and
(b) for “equal to” substitute “not less than the amount of the deposit and
not more than”.
(10) Section 215 (sanctions for non-compliance) is amended as follows.
(11) In subsection (1) (prevention of service of notice under section 21 of the
Housing Act 1988)—
(a) at the beginning insert “Subject to subsection (2A),”, and
(b) for paragraph (b) substitute—
“(b) section 213(3) has not been complied with in relation to
the deposit.”
(12) In subsection (2) (prevention of service of notice under section 21 of the
Housing Act 1988) at the beginning insert “Subject to subsection (2A),”.
Localism Act 2011 (c.
20)
Part 7 — Housing
Chapter 6 — Other housing matters
194
(13) After subsection (2) insert—
“(2A) Subsections (1) and (2) do not apply in a case where—
(a) the deposit has been returned to the tenant in full or with such
deductions as are agreed between the landlord and tenant, or
(b) an application to a county court has been made under section
214(1) and has been determined by the court, withdrawn or
settled by agreement between the parties.”
(14) In Schedule 10 (provisions relating to tenancy deposit schemes) in paragraph
5A(9)(b) (modification of section 213(3)) for “14” substitute “30”.