Landlords to be aware of new tenancy deposit legislation

Landlords have welcomed significant changes to tenancy deposit protection legislation passed in the House of Lords.

Amendments to the Deregulation Act 2015 replace the old confusing tenancy deposit rules which left many landlords puzzled and at risk to heavy fines.

The new legislation is clearer for Landlords to understand and comply with regulation. However, landlords will only have until June 24, 2015 to avoid penalties under the new rules and so need to take note.

The changes are as follows:

Deposits taken prior to April 6, 2007 where tenancy becomes statutory periodic after April 2007

 If a Landlord took a deposit in respect of a statutory fixed term Assured Shorthold Tenancy before the 6 April 2007 which became a statutory periodic tenancy after the tenancy deposit scheme legislation came into force on 6 April 2007, then the Landlord will not be jeopardised if they protect the deposit and provide the relevant prescribed information within 90 days of the Bill gaining Royal Assent. This gives Landlords until 24 June 2015 to comply.

 Deposits taken after April 2007

 If the Landlord took a deposit after 6 April 2007, which was placed into a tenancy deposit scheme and the relevant prescribed information was served on the Tenant, then if the Assured Shorthold Tenancy became, or becomes a statutory periodic tenancy the Landlord’s compliance with the tenancy deposit scheme legislation in respect of the original Assured Shorthold Tenancy will suffice. It is made clear that these amendments to the Housing Act 2004 confer no protection on those Landlords who never protected the deposit during the original tenancy.

 Deposits taken prior to April 2007 where tenancy becomes statutory periodic before April 2007

Any Landlord that at the start of the tenancy took a deposit and that tenancy became a statutory periodic tenancy before the tenancy deposit scheme legislation came into force on the 6 April 2007 should now protect those deposits and there will be no power to serve a Section 21 notice until this has been complied with. The legislation confirms that there are no financial penalties for failing to do so.

Details of an agent who protected the deposit for the Landlord at the outset, instead of the Landlord can now be given in the Prescribed Information.

Failure to comply with the law 

Not fully complying with the legal requirements can leave Landlords open to restrictions. With an inability to serve a valid section 21 notices to gain possession where a deposit has been taken and not placed within a tenancy deposit scheme, the Landlord will be liable in returning the deposit to the tenant prior to serving a section 21 notice. They may also face a tenancy claim for the deposit for between one and three times the amount which can be a large sum.

The only way to ensure that you follow the legislation is to be aware of these changes, to rectify non-compliance in the past and protect a deposit taken at the start of an Assured Shorthold Tenancy.

To find out more about this ever changing area of law, call the experts on 01200 408 303 or email Katie Lofthouse at