The importance of protecting your tenant’s deposit
10th September 2016
The requirement to protect a tenancy deposit taken for an assured short hold tenancy in England and Wales was introduced on 6 April 2007, following its inclusion in the Housing Act 2004. Initially, deposits needed protecting within 14 calendar days of receipt by the landlord. This was subsequently changed to 30 days on 6 April 2012 as a result of the Localism Bill 2011. The legislation was introduced because the Government recognised many deposits were being unfairly withheld at the end of a tenancy. Introducing Tenancy Deposit Protection was identified as a way to raise standards in the lettings industry and ensure tenants are treated fairly at the end of the tenancy.
I remember a landlord being taught a painful lesson regarding this. He had a property which had been rented to a family that had lived there from 2006, with which he had never experienced any problems. However after a change in the tenants’ situation after a few years suddenly the rent was only being paid in drips and got later and later each month. After three months the landlord decided that this was not acceptable so he decided to give the tenants notice to leave the property. Notice was served and the end of the tenancy came, however the tenants decided that they were not going to move out. So the inevitable next step of court action commenced, and the relevant details were passed on to the landlord’s solicitor. After four months everything was all set and ready until the solicitor noticed that back in 2006, when the tenants moved in, that the deposit had been paid to the landlord as at this point in time it could be held by him, however when he had renewed the tenancy (after the new law had been introduced) he had not protected the deposit, so by law he would need to refund the deposit and then start the proceedings all over again! During this time the tenants did not pay any rent, totaling six months of rent arrears, and to top it all off the tenants then took the landlord to court for not protecting the deposit and the landlord was ordered to pay a fine to the tenants which was three times the deposit amount!
- Rent arrears £11,700
- Fine for not protecting the deposit £8,100
- Court costs £550
- Total landlord costs £21,550
- Cost of agent protecting the deposit £35-65 + vat
Make sure you do not fall foul of the law either by your own actions or by your agent letting you down. Contact us on 0207 993 4719 today to talk through your situation or any questions that you may have