Residential tenant deposits must be placed into a tenancy deposit scheme. This even applies to assured shorthold tenancies which started before the tenancy deposit rules came into force on 6 April 2007.
Failure to protect a deposit can result in:
- A landlord and / or agent being ordered to pay a fine to the tenant, for an amount up to three times the amount of the deposit.
- A landlord being prevented from relying upon a s.21 notice to recover possession of the property. If a s.21 notice is to be relied upon, at the time of service the deposit must be protected.
The rules and fines apply to landlords and their agents. Many agents don’t know this so both are best to check whether the deposits are protected for tenancies of all ages.
Tenants and Tenant Deposits
Tenants should check whether the deposit is protected and if not, consider applying to court for the compensation. Obviously, the greater the rent, the greater the potential fine. With letting agents being unregulated, tenants need to be careful who handles their tenant deposit.