Increased penalties for failure to comply with deposit rules.
It’s all change again on the tenancy deposit front with The Localism Act 2011 receiving Royal Assent on the 15th November 2011 and its changes thought likely to come into force in April 2012.
The Localism Act will amend the Housing Act 2004 which currently requires the landlord or agent to register the deposit within 14 days of receiving it and to supply the tenant with the details of the scheme.
The Localism Act makes the following changes to the way deposits are to be dealt with and the penalties for failure to carry out those requirements:
- The time period for complying with the initial requirements of a scheme and providing the prescribed information is to be extended from 14 to 30 days after the receipt of the deposit. Therefore the landlord/ agent needs to pay close attention as it is not from the start of the tenancy but the date the deposit is received which may be in many cases some months before the tenancy commences.
- If the Landlord fails to comply with the time limits imposed by the statute i.e. within 30 days of receipt a penalty will be payable come what may.
- The amount of the penalty will be at the Court’s discretion but will be no more than three times the amount of the deposit. .
- The Landlord will no longer escape liability for the penalty if he/she complies with the requirements before the day of the hearing of the tenant’s claim.
- The tenant will be allowed to bring a claim against the landlord for failure to comply with the rules even if the tenancy has ended.
- The restrictions regarding the service of a section 21 Notice have been removed where the deposit has been returned in full, or returned less any agreed deductions.
Landlords must take great care to ensure they comply with the deposit scheme, as failure to do so could prove very expensive.