Another hurdle for landlords regarding deposits
If you are a landlord, our lawyers are warning that a change to the law relating to residential tenancies could pose yet another problem to you and an order to pay up to three times the deposit to your tenant.
The passing of the Deregulation Act in April has brought about another change meaning that all deposits taken by landlords from residential tenants must be properly protected.It means that they must be registered with one of the tenancy deposit scheme providers – Deposit Protection Service, MyDeposits and Tenancy Deposit Scheme.
Holly Sadler, a property lawyer at Gotelee, which has offices in Ipswich, Hadleigh and Felixstowe, said: “The key points to note are that landlords must put their tenants’ deposit in one of the schemes within 30 days of receiving it and they must give tenants certain information, including where the deposit is protected, within those 30 days .I see disputes over this issue all the time.”
This new law has been created in response to complaints from tenants who were unable to get their deposits back at the end of their tenancy. The deposit scheme offers protection to the deposit via a free service to resolve any disputes between the landlord and the tenant.
Landlords will be aware that this was already a requirement for any deposits received after April 2007, but the new rules apply to those deposits that were taken before 2007, and require that these deposits are registered before June 23.
Failure to comply can result in two penalties to landlords 1. a court ordering the return of the deposit to the tenant and up to three times the value of the deposit. 2, the landlord will be unable to serve a valid section 21 notice (notice to end the tenancy) unless the law about protecting the deposit has been complied with. This may prevent the landlord from regaining possession of their property when the tenancy comes to an end.
If landlords are in doubt as to whether they are obliged to register any deposit they hold, they should seek further advice without delay.
All landlords must review their portfolios and protect any deposits which have so far, slipped the net, by June 23.
Gotelee regularly advise both landlords and tenants on their rights and obligations relating to tenancy deposits, and provide assistance in resolving any related disputes, both in and out of court. You can speak to Holly directly about matters that might concern you regarding this deposit scheme on 01473 298193 or email [email protected]
Gotelee is a leading Suffolk firm of solicitors offering a range of legal services from its offices in Ipswich, Hadleigh and Felixstowe. Get in touch by visiting www.gotelee.co.uk or calling 01473 211121.
