The Deposit Protection Service is reminding letting agents and landlords that they have to act with extreme urgency over older tenancy deposits because new legislation comes into effect in exactly one week’s time.
Following the Deregulation Act, which passed into law at the end of March, landlords have until June 23 - that’s next Tuesday - to protect deposits that were taken before April 6 2007 and which they are still holding for periodic tenancies agreed on or after that date.
Periodic tenancies are those which continue on a period-by-period basis once the term specified in the original agreement has passed.
The new act has also clarified the uncertainty created by a June 2013 decision by the Court of Appeal in the Superstrike v Rodrigues case over the need for landlords to provide ‘prescribed information’ upon every renewal or the tenancy becoming periodic.
The new act states that if the prescribed information has been validly given in relation to an initial tenancy, it does not need to be given again in respect of replacement tenancies (except where circumstances or details change).
Prescribed information is the information that a landlord must by law make available to the tenant about the deposit protection scheme protecting their deposit and other specific details about the deposit and tenancy.
“The DPS welcomes these changes, which provides much needed clarity over the protection of older deposits. It brings an end to confusion over the management of deposits taken before the legislation came into force that have been retained by landlords past their original tenancy period” says DPS managing director Julian Foster.
He says letting agents should take independent legal advice in order to understand how this and other changes in the Deregulation Act 2015 affect their particular circumstances.