Legal update regarding the registration of deposits under the Deregulation Act 2015
The Deregulation Act 2015 (DA) was passed on 26 March 2015 and covers various points which will be of interest to landlords and those appointed to deal with residential properties. Below is a brief summary relating to deposits and any practical implications.
Amendments in the Deregulation Act 2015 herald the demise of the often confusing tenancy deposit rules that have been in place following the Court of Appeal decision in the Superstrike case. Although the new rules will still not help if you have failed to protect a deposit taken after April 2007, the rules have at least become much simpler and easier to understand and are now as follows:
1. Deposits taken before April 2007 which became periodic before that date
In this case you are not in breach of the law. There is no need to protect the deposit now and landlords will not be liable for any financial penalty for non protection. However, if you wish to serve a Section 21 Notice in cases like this the deposit must be protected or the money returned to the tenant (or the person who paid it) before you can serve the Notice.
2. Deposits taken before April 2007 where the tenancy became periodic after that date
All deposits must now be protected and the prescribed information must be served. Landlords and agents were given a period of 90 days grace to deal with this by 23 June 2015.
If you protect the deposit and serve the prescribed information within this time, the deposit will be treated as if it had always been protected. If you don’t, you will be in breach of the law and subject to fines and civil penalties.
3. Deposits taken after April 2007 that have been protected and the prescribed information served during the original fixed term
These cases will be treated as if the prescribed information had been served on every renewal or whenever a statutory periodic tenancy arose – even if the prescribed information was served late initially. Provided of course that the deposit continues to be protected with the same deposit scheme you do not need to keep re-serving the prescribed information.
The other significant changes to the rules concerning prescribed information embodied in the Deregulation Act are to allow for the letting agents’ details to be given instead of landlords’ details where the agent is dealing with the deposit. Previously it was the landlord’s address and contact details that had to be supplied, even if everything was handled by the agent.
Pace has registered all deposits, before and after the 06 April 2007 and can ensure our clients that we are compliant with the Deregulation Bill 2015.
Marcus James is Lettings Manager at Pace, an independent Southend on Sea Letting Agent. He deals with every aspect of the property letting process, providing expert and candid advice together with tailor-made marketing plans for each property he lists for rental.
Marcus prides himself on ensuring our landlord clients get the best return in the right timeframe for their investments by conducting rental appraisals, letting viewings and oversees the running of the lettings department.
