Landlords beware – further expansion of Tenancy Deposit Schemes!
Following on from the introduction of Tenancy Deposits Schemes on 6 April 2007, the Housing Act 2004 has now been amended further to expand and give more protection to Tenants and deposits paid under Assured Shorthold Tenancies.
Previously, a landlord was required to protect a deposit under a tenancy deposit scheme and had to do so within 30 days of receiving the deposit, on or after 6 April 2007. The Localism Act came into force in April 2012, so if a deposit was taken previously but on or before the 6 April 2007, they had 30 days from the day the Localism Act came into force to protect the deposit.
On the 26 March 2015, the Deregulation Act 2015 came into force. Section 31 and 32 inserts a new section to the Housing Act 2004. This new section introduces an obligation on a landlord to deal with a deposit taken before the 6 April 2007 and it applies retrospectively.
What does this mean?
If a landlord has taken a deposit from a tenant before the 6 April 2007, this will now need to be secured under one of the permitted tenancy deposit schemes. It doesn’t matter whether the tenancy is for fixed period or running periodically, the deposit must still be secured before 90 days beginning on the 26 March 2015 in order to comply with S215A of the Housing Act 2004.
Landlords must therefore ensure that all deposits taken under Assured Shorthold Tenancies are secured with a tenancy deposit scheme on or before 23 June 2015, or risk financial penalties and also not being able to recover possession of their properties until they have done so.
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