From next year, agents and landlords will have 30 days in which to protect a tenant’s deposit, rather than the current 14.
The change is part of ‘tweaks’ made to tenancy deposit protection in the new Localism Act 2011.
These were made following court cases over the rights of a tenant to sue for a breach of the deposit protection legislation or when deposit money was not protected within 14 days, but by the time of a court hearing.
The revised legislation also does away with mandatory penalties of three times the deposit if the deposit is not correctly registered and the ‘prescribed information’ not properly given.
Instead, courts will be allowed to use their discretion to hand out penalties worth between one and three times the value of an unprotected deposit.
The current legislation has had a number of challenges within the courts, which have issued varying rulings – some in favour of tenants and others in favour of landlords.
Welcoming the changes, the chief executive of the Tenancy Deposit Scheme, Steve Harriott, said: “I am pleased the housing minister managed to find the parliamentary time to get these amendments to the legislation through.
“The recent court decisions were causing confusion about tenancy deposit protection regulations. These amendments make it clear that tenancy deposit protection is here to stay.”
Full details of the changes are available in new guidance notes issued by the Tenancy Deposit Scheme which can be seen on www.tds.gb.com
Further guidance for members will be issued when the Commencement Order is published.
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Comments
'Paul' If the deposit is lodged just prior to a court date then it's protected, albeit late and that is the whole point of the legislation. I agree the bigger picture is why it's being protected so late but better late than never!
Like Ray I've no idea what the first part of Paul's post is about - it reads as if Paul thinks agents take a cut from the tenants' deposits.
14 days might be plenty of time in a small lettings operation which perhaps only take two or three deposits a week and has just one member of staff dealing with the process end-to-end.
In an office such as ours where, in a busy week we might have 20 tenants moving in the 14 day deadline can be a bit tight, especially if a couple of bank holidays are chucked into the equation.
30 days is sensible - it sets a deadline but makes allowances for the real world.
What difference does 14 days to 30 days make? Those agents which chose to ignore the law before are hardly going to see sence because they have a little longer to protect deposits.
Tenants need to be made more aware of the deposit protection rules. The number of new tenants we have who say they were never told about any protection schemes by previous agents or landlords amazes us.
Deposits can be passed into deposit protection schemes in an instant online. So as long as the funds are all cleared we often do this whilst the tenants are here in the office signing all the tenancies. Everyones happy, we are within the law and no work left outstanding so we can get on with letting and looking after our properties.
What date is this effective?
Agree with Paul on chargebacks - be careful. Banks always take the consumer's side.
@Paul
I agree fully with the last two sentences of your post - I adhered to this without fail.
Agreed 30 days is too long. However, I cannot make sense of the rest of you post.
It is the tenants deposit being protected - where does the anything come in regarding distribution (agent or landlord) at the beginning of the tenancy - or am I missng something
28 instead of 14 days is stupid and will still mean that many EA's will flout the law. That has been demonstrated as well we all know with funds suddenly being lodged just prior to a court date.
Should be 7 days because bet you a pound to a pich of salt the EA takes his cut within 7 days. I know I do. Sending money to landlords needs to happen quickly otherwise they start to jump up and down and they don't come back next time. What's the difference with the doposit? There isn't one.
For this reason I don't do credit/debit cards because there are claw back arrangements that you have no control over.
Cleared funds in my client account or no keys.
Signed documents or no keys.