• 25 JUL 14
    Warning for Landlords as law surrounding ASTs is changed

    Warning for Landlords as law surrounding ASTs is changed

    A new law will force landlords of assured shorthold tenancy agreements (AST) to comply with all three stages of tenancy deposit rules.

    ASTs, the most frequently used tenancy agreements in residential property letting, see the landlord and tenants agree on the minimum term and amount of rent usually over six month period.

    Previously landlords were able to request a deposit at the commencement of an AST and place it in an authorised Government scheme within 30 days of the fixed term starting. Complying with the requirements of the scheme and providing the prescribed information within 30 days of taking the deposit was necessary for a landlord needed to take to remain compliant.

    Following a recent case (Gardner V McCusker) it is now crucial for landlords to re-register the deposit at the start of a new tenancy, particularly when a fixed term tenancy has expired and a statutory periodic tenancy has come into effect. In addition, information provided at the start of the agreement may needs to be re-submitted.

    Adhering to all three stages of the tenancy deposit rules both at the start of any fixed term and within 30 days of that fixed term coming to an end should therefore be a full requirement if the tenancy rolls on or a new fixed term is entered into.

    Legal executive and expert in residential lettings, Carla Williams said: “Not fully understanding the legal requirements for ASTs can leave landlords open to restrictions.

    “From an inability to serve a valid section 21 notices to gain possession or liability in returning to the deposit to a tenant or tenancy deposit scheme the rules can cause Landlords grave concerns. They may also face a tenancy claim for the deposit for between one and three times the amount which can be a hefty sum.

    “The only way to ensure you follow legal requirements is to be aware of deposit rules in advance of arranging ASTs, this can prevent tough sanctions for failing to comply.”

    If you are a landlord in need of expert advice, please contact Carla Williams on 01706 232 032 or email carla.williams@whnsolicitors.co.uk