New tenancy deposit rules come into effect today have been given the thumbs-up by The Association of Independent Inventory Clerks.
Under the Deregulation Act, tenancy deposits taken before April 6 2007 now fall under deposit protection law. From today landlords must register these deposits with one of three government-approved tenancy deposit protection schemes - my|deposits, The Deposit Protection Service and The Tenancy Deposit Scheme.
Any landlords now holding unprotected deposits could face a penalty of between one and three times the value of the deposit and restrictions on regaining possession of their property.
Letting Agent Today has reported in recent weeks that many industry players have been keen to remind landlords, and agents acting on their behalf, that some 300,000 existing tenancies across the UK may be affected by the new rules.
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.
Pat Barber, chair of the AIIC, says today’s regulation change “is another positive step towards raising standards in the professional lettings sector” and builds on “the huge success” of mandatory deposit schemes, which have been in force since 2007.