There are only a few weeks left for landlords and letting agents to register existing deposits with a government-approved deposit protection scheme.
Since 2007, all landlords have been legally obliged to register deposits under one of three approved protection schemes: the Tenancy Deposit Scheme, My Deposit or the Deposit Protection Service. However, a change in the law means that all deposits taken before 6th April 2007 must also be registered under one of the schemes.
The Government has provided a period of amnesty, during which time no landlord can be penalised for non-compliance. The idea is to allow landlords to step forward and register unprotected deposits. This window of opportunity is set to close very soon, however, on 23rd June 2015.
Landlords holding unregistered deposits after this date will face fines of up to three times the value of the deposit, as well as limitations on their rights to regain possession of their properties at the end of a tenancy. This is because a failure to hold a deposit under a protection scheme is considered a breach of the terms of the tenancy.
If you’re a landlord, it’s important to remember that it is not enough to have simply registered with a scheme; you must also provide your tenants with written confirmation that the deposit is held under one of the approved schemes – otherwise, a fine could still be levied.
Under normal circumstances, a landlord has 30 days to register a deposit after the commencement of a tenancy. It has been suggested that private landlords are particularly at risk in terms of facing penalties for non-compliance as they tend to be less aware of the latest property legislation than professional landlords or agents.
There are a few circumstances where landlords may be exempt from the deposit protection rules – live-in landlords, tenancies worth £100,000 a year or more, company lets and university accommodation do not fall within the remit of the law. All other tenancies, however, need to be covered by one of the aforementioned schemes.
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