Tenancy Deposit Scheme changes.
Changes to the Tenancy deposit scheme came into effect on the 6 April 2012. Any deposit must be protected and the Prescribed Information provided to the tenant within 30 days of receipt. The tenant must have received the Prescribed Information (including the explanatory leaflet What is the Tenancy Deposit Scheme) and the TDS deposit protection certificate, and the deposit must have been registered on the TDS tenancy database within the new 30 day limit.
The requirement to protect within 30 days of receipt is absolute. A claim can be made from 31 days after the deposit payment was made, if the requirements relating to protection of the deposit have not been complied with the claim will be for the return of the full sum of the deposit along with a penalty of between one and three times the sum of the deposit, to be awarded at the discretion of the Court.
Even if the deposit is protected after 30 days, in retrospective compliance, this does not prevent a claim being bought for a breach of the deposit requirements.
A Section 21 notice cannot be relied on if there has been no compliance within the 30 days. If the deposit is returned in full or with deductions as agreed or if the tenant and/or third party have taken proceedings for non-protection and these have been concluded, withdrawn or settled, a Section 21 notice can then be served.
A claim can be bought for a penalty award even where the tenancy has ended.
The act isn’t retrospective but you should ensure you comply with the terms of the act if a deposit was taken before the 6th April but the tenancy commences after.
It is thought that the new rules apply to renewals so ensure you comply.
The rules only cover Assured Shortholds commenced after April 2007.
For advice on Landlord and Tenant Matters call Carruthers Law today.