5 April 2012 by Yezdan Izzet

UPDATE: Changes to the requirements relating to Tenancy Deposit Schemes, Assured Shorthold Tenancies

On 6 April 2012 section 184 of the Localism Act 2011 which amends sections 213-215 of the Housing Act 2004 will come into force.

You may be aware that since 6 April 2007 landlords of residential properties are required to place any deposit received pursuant to an Assured Shorthold Tenancy Agreement into a Tenancy Deposit Scheme. This is a government scheme which was set up for the purpose of safeguarding deposits and for facilitating the resolution of any disputes arising in connection with the deposits. At present there are only 3 authorised providers of the scheme.

On 6 April 2012 the time limit within which a landlord must comply with the requirement to protect a deposit (by placing it into an authorised scheme) and provide the tenant with prescribed information (which you can obtain from the relevant authorised provider) will be extended from 14 to 30 days.

Under the Housing Act 2004 the penalty for non-compliance by a landlord was that on application to the Court by a tenant, the Court was required to make order the landlord to pay a penalty equal to 3 times the deposit amount to the tenant. However, case law resolved that the penalty did not apply where the tenancy had already come to an end at the time the tenant made his Court application. In addition, in the past where the landlord had missed the initial deadline for protecting the deposit but subsequently did so prior to the tenant’s Court application being made, the Courts took the view that the penalty would not apply.

The changes to the Housing Act 2004 now makes it clear that the penalties for non-compliance will apply when the landlord has not complied with those time limits and clarifies that penalties for non-compliance will also apply when the tenancy has ended. The Court does however have discretion as to the amount of the penalty that may apply.

Another significant change is that previously where a landlord was seeking possession of the property in reliance of section 21 of the Housing Act 1988 (which gives the tenant 2 months notice to vacate where the fixed term of the tenancy has ended) he/she could not serve a valid section 21 notice if the requirements relating to the tenancy deposit had not been complied with.

Landlords are now able to seek possession under section 21 of the Housing Act 1988 where the deposit is not held in a tenancy deposit scheme or the time limits have not been complied with, provided action has been taken to rectify the situation.

Please see this link which sets out the details of the 3 authorised providers: http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/Tenancies/DG_189120

For more information or if you have any questions please contact us at info@boltburdon.co.uk

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For the last few years, competitively priced mortgages have only been available to those buyers with a 10% to 20% deposit. This has made it very difficulty for many first time buyers to get finance which in turn has led to a lack of demand for those further up the ladder.

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2012 Budget Tips for Individuals; the Angel’s in the Detail

The main points of the 2012 Budget have been well documented by the media over the past week, and you may feel like you have Budget overload, but there are relevant points that are buried in the detail which could be useful for you beyond the hackneyed income tax and stamp duty land tax changes.

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