Tenancy Deposits – Initial Requirements and Pitfalls
Since 6 April 2007 deposits taken by landlords for residential assured shorthold tenancies must be protected in accordance with the Tenancy Deposit Scheme.
The Tenancy Deposit Scheme requires landlords to comply with what are known as the initial requirements and give certain prescribed information to the tenant. This must be done within 30 days of receipt of the deposit. This 30 day time limit cannot be avoided and must be complied with.
If a landlord fails to comply with the initial requirements after receiving the tenancy deposit, a landlord cannot proceed with obtaining possession under the Section 21 procedure. This can cause delays at a time you may want to recover possession of your property. Further, you could incur unnecessary costs.
In addition to this, a landlord can be sued for the return of the deposit plus an additional three times the deposit amount. Therefore, this could result in the landlord incurring a hefty financial penalty.
As indicated above a failure to deal with a tenant’s deposit correctly can prove extremely costly for a landlord.
Key points when dealing with tenancy deposits
- Have you failed to protect your tenants deposit within 30 days?
- Have you failed to provide the prescribed information?
- Is your tenant threatening to, or have they already brought a claim against you?
If you answer yes to any of the above, you need to act immediately. Case law has set out how Judges will deal with the above issues in relation to tenancy deposits. Delaying dealing with this could prove more costly.
If you require help with tenancy deposits matter or any other property dispute, please contact Mark Fagan by calling 0113 320 5000 or completing our contact form.