Mrs A. Thompson –v- Scancrown Ltd, trading as Manors In a case that received widespread…
PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.
Section 32 of the Deregulation Act 2015 came into force on 26th March 2015 and has inserted section 215A into the Housing Act 2004. This has the effect of extending the requirements to protect deposits taken in respect of Assured Shorthold Tenancies, even where the tenancy was originally created before 6 April 2007.
Section 215A applies where all of the following are satisfied:
- Before 6 April 2007, a tenancy deposit has been received by a landlord in connection with a fixed term AST; and
- On or after 6 April 2007, a periodic AST is deemed to have arisen under section 5 of the Housing Act 1988 at the end of the fixed term AST; and
- On the coming to an end of the fixed term AST, all or part of the deposit paid in connection with the fixed term tenancy is held in connection with the periodic tenancy; and
- The landlord has not complied with the requirements of section 213(3), (5) and (6) of the HA 2004 in relation to the deposit held (to protect the deposit in a Statutory Scheme and provide the prescribed information to the tenant(s).
The requirements regarding protecting the deposit and the provision of prescribed information will be satisfied if they are complied with before the end of 90 days beginning with the commencement date of the DA 2015.
This means that if a landlord fails to join one of the Tenancy Deposit Schemes and protect the deposit before 23 June 2015, they may be liable to financial penalties (of up to 3 times the amount of the deposit) and more importantly may be prevented from recovering possession of their property from the tenant.
Our advice to all residential landlords is to review all their tenancy contracts and deposits. Any deposits that have not already been protected – take immediate steps to do so.