Localism Act - changes to tenancy deposit rules-early April 2012

tbs624

Useful guidance from Painsmith's blog on the changes on deposit issues due to take effect around 6th April 2012

Source

Note that it is not yet clear whether this will apply to pre-existing tenancies or to post 6 April 2012 tenancies

Where the deposit has not been registered within the required 30 days the courts will have discretion to award a penalty of between 1x and 3x the deposit.

Painsmith highlight that an LA can be

"liable for a failure to protect the deposit and can be sued in preference to the landlord. However, the advent of the new variable penalty would now allow a court to make an order against the agent with the penalty fixed at the lower end of the scale if they were not responsible for registering the deposit."

See also the comments relating to the service of s21 notices if deposit not registered within the required 30 days

ognum

I got this today by email from the RLA

Good news for tenants who will be able to claim against the landlord if the deposit isn't protected even after the tenancy has finished and also it will be impossible to present a Section 21 notice to quit if the deposit is not in a scheme.

princeofpounds

Good news.

*bump*

lighting_up_the_chalice

ognum wrote: »

.......... and also it will be impossible to present a Section 21 notice to quit if the deposit is not in a scheme.

This is already the case. But what HAS changed is that the S21 cannot be served if the deposit requirements weren't met within 30 days of the deposit being received (unless the deposit is returned prior to service of S21). I look forward to that one being tested!

Thrugelmir

You can see a flood of posts from LL's hitting the forum in a couple of months time........

Long overdue amendment to the law.

jjlandlord

This all means that the Tiensia and Hashemi decisions will not have any force after the 6th April

It is not clear whether the new provisions will apply to tenancies that began before the 6th April 2012

So it should also be unclear how the Tiensia and Hashemi decisions will be considered after 6th April for tenancies started before 6th April, imho.


Certainly the localism act does not restrict the changes to apply only to tenancies entered into from 6th April.
I'm wondering if there are common rules/precedents on such cases, or if it'll be down to courts to decide.

ognum

lighting_up_the_chalice wrote: »

This is already the case. But what HAS changed is that the S21 cannot be served if the deposit requirements weren't met within 30 days of the deposit being received (unless the deposit is returned prior to service of S21). I look forward to that one being tested!

Yes you are correct that is what I meant to write!

Thrugelmir

jjlandlord wrote: »

So it should also be unclear how the Tiensia and Hashemi decisions will be considered after 6th April for tenancies started before 6th April.

They won't be relevant. The new law will take precedence. So those that fail take the necessary action prior to the passing of the Act will leave themselves totally exposed.

One would hope that professional landlords already take their responsibilities seriously. So only affects the "cowboys" that play by their own rules.

lighting_up_the_chalice

Thrugelmir wrote: »

They won't be relevant. The new law will take precedence. So those that fail take the necessary action prior to the passing of the Act will leave themselves totally exposed.

One would hope that professional landlords already take their responsibilities seriously. So only affects the "cowboys" that play by their own rules.

I wouldn't be so sure of that. It is unusual for legislation to be applied retrospectively.

jjlandlord

Thrugelmir wrote: »

They won't be relevant. The new law will take precedence.

So you disagree that it is unclear whether the new law will apply to tenancies that will have begun before 6th April.

Thrugelmir

lighting_up_the_chalice wrote: »

I wouldn't be so sure of that. It is unusual for legislation to be applied retrospectively.

Aren't deposits supposed to placed in one of the three approved schemes already?

This particularly change merely blocks the loop holes.

Much in the same way taxation legislation does when its introduced.