Letting agents and property managers are being encouraged to urge landlords to check that their tenants’ deposits have been stored in a Government-protected scheme by the close of play today (Tuesday 23rd June) or they could be liable to pay the occupants of their property compensation.
The deadline, which was imposed as part of the Deregulation Act, will impact on landlords who have existing tenancies that commenced before Tenancy Deposit Protection (TDP) was introduced in England and Wales in April 2007.
Landlords and agents who still hold a deposit on a tenancy that started prior to 6th April 2007 and then rolled into a Statutory Periodic Tenancy (SPT) on or after that date must protect the deposit and serve the prescribed information by today to prevent being fined.
For deposits taken before the 6thApril 2007 and where the tenancy became periodic prior to this date, landlords and agents are not required to protect the deposit however, they will not be able to serve a section 21 notice to regain possession of the property unless the deposit is protected with a tenancy deposit scheme.
This new legislation is viewed upon as “another positive step towards raising standards in the professional lettings sector” by Pat Barber (left), Chair of the Association of Independent Inventory Clerks (AIIC), who added that she is “pleased to see it coming into force this week.”
Mydeposits, one of three Government-authorised tenancy deposit protection schemes, estimates that as many as 330,000 existing tenancies could be affected. Landlords who fail to protect their tenants’ deposits and supply the prescribed information by the close of play today could face fines of up to three times the deposit.
Research by mydeposits suggests that almost half – 48 per cent – of landlords struggle to keep up with changes in legislation which could exacerbate the issue.
“Mydeposits’ figure that almost half of landlords struggle to keep up with changes in legislation comes as no surprise to us and it is important for all agents and landlords to work together to ensure that all required deposits are now protected,” added Barber.
Since it became mandatory in 2007, deposit protection has been viewed as a success by many professionals working within the industry, and with the volume of tenancies continuing to grow and the amount of money being taken in deposits continues to increase, it remains an important component of the modern rental process.
Eddie Hooker (right), CEO of Mydeposits, said, “It’s important that landlords and letting agents are aware of the legislation changes and how it affects them. They must act now and check whether they need to protect any deposits and avoid a fine.”
Hooker added, “Our advice is simple; if you still have a deposit that was taken before 7th April 2007 then the belt and braces approach is to protect it and provide your tenant with all the relevant information as soon as possible. That way you can avoid a hefty penalty and regain possession if needed.”
Mydeposits is offering a 50 per cent discount on their joining fee for all landlords who sign up to the scheme before the close of play today by using discount code SUM15.