MyDeposits is to end deposit protection automatically after the end of the fixed term of the tenancy unless specific action is taken by the agent or landlord.
The scheme, a spin-off of the National Landlords Association, has not appeared to make any announcement about the change, but details appear on its website.
It says that users of its scheme – mainly landlords, but also a number of agents – will have 30 calendar days from the end of the fixed term of the tenancy agreement to renew or extend the deposit protection.
The agent or landlord must also re-issue the Prescribed Information to a tenant who stays on when the tenancy becomes statutory periodic. If the same tenant stays on but signs a new fixed-term AST agreement, then new Prescribed Information must be issued.
The scheme will send four email alerts as the automatic unprotection date approaches.
In a FAQ section, Mydeposits says it is unprotecting deposits as a result of the Superstrike case.
It says: “Since the Superstrike case we are making sure that our Scheme Rules are followed and helping landlords to comply with the law. Section C4 of the rules tell you that we reserve the right to automatically unprotect a deposit at the expiry of the fixed term and inform the tenant. We are now enforcing this rule. We won’t unprotect a deposit without telling you first. You will have plenty of opportunity to update your protection status.
“ … We will automatically unprotect a deposit protection 30 days after the fixed term ends unless you inform us tenancy has rolled into an SPT or has been renewed. You will receive several email reminders to make you aware that the protection is coming to an end. Please make sure your email address is up to date.”
MyDeposits is the only tenancy deposit scheme to be taking this action.
Chris Kendall, of the TDS, said: “The change only affects MyDeposits members.
“TDS letting agents have annual membership and their deposits remain protected when a statutory periodic tenancy starts and protection continues until they end it or they end their membership.
“TDS landlords protect on a ‘pay as you go’ basis for the life of the tenancy and their tenants’ deposits are also protected until ended by the landlord.
“The only issue for TDS members at the start of a statutory periodic tenancy is to re-serve Prescribed Information, in light of the Superstrike decision. Protection of the deposit continues and is not ended automatically by the Tenancy Deposit Scheme.
More on the changes at MyDeposits below:
http://www.mydeposits.co.uk/landlords/auto-unprotect/how-it-will-work
Comments
@ Dan
The problem lies firmly with the DCLG. The judiciary merely interpret what the Government set out as a law; if the penpushers in Whitehall get it wrong then the law will fail completely or fail to operate in the way the DCLG expected it to.
I doubt the DCLG ever intended the deposits to be reprotected at the point a tenancy was renewed, but by using the word 'new' in regards to a tenancy they got it wrong.
The judge was correct in saying that a periodic arising from a fixed term is a 'new' tenancy, and thus under the law required protection and the PI to be reissued, but I suspect the DCLG actually meant new tenancy in the purest sense, i.e. a new tenant.
Schoolboy error thats caused lots of grief all round. Will we see the relevant persons head on a stick outside the Tower? sadly not.
There should have been an appeal in the Superstrike case as that caused many issues. Agents can only go by the advice of the relevant scheme providers and their remit from DCLG.
If it was incorrect in the first place dont set retrospectively - the Landlords and Agents were not at fault but end up paying the price, Bringing in the issue with Section 21 notices in the first place was out of order.
All this guidance based on superstrike about re serving prescribed info etc on renewal/ , new tenancies and periodic tenancies should not be necessary unless there has been a real material change i.e the amount of the deposit etc - if there are no real changes the deposit should just remain protected - thats what the legislation was there for in the first place
@moretoit - you are quoting TDS landlord membership.
With TDS agent membership, we pay annually and deposits stay protected until I take them off - which is the way it should work. I rang TDS to clarify and the article confirms it.
Looks like a massive mydeposits own goal to me.
@moretoit - spot on. Protection unless instructed to the contrary is far better for all.
'TDS landlords protect on a ‘pay as you go’ basis for the life of the tenancy'
Really ? So why do we have to pay an annual membership cost based on the number of live deposits, regardless of the term of the tenancy ?
For the purposes of protection why can't deposit schemes assume that all tenancies roll onto periodic unless told otherwise ? Yes, we still have to serve the prescribed information but at least such a move would get over the reprotection pitfall ?
"...our Government will scrap all unnecessary red tape".
Yeah...right.
This is likely to make an already cumbersome process even worse and I can't see why its relevant to superstrike - its a straightforward way of raising reprotection fees and making more work for the agent